communications policy nabarro nathanson reception iasb Work plan ...

EPRA NEWS - ISSUE 21 

guest editor Allan Saunderson 

communications policy 

features 

nabarro nathanson reception 

iasb Work plan for 2007 and 2008 

IntervIew wIth wolfhArd leIchnItz 

BroAdenIng InveStment StrAtegIeS 

i ss u e 21 

market focus 

back to reality 

ProS And conS of ruSSIAn InveStment 

gloBAl mutuAl fundS exPlode 

cAStellum

As at 26 March 2007 

EPRA MEMBERS 

AustrAliA 

• Univ. of Western Sydney, Property 

Research Centre 

• Valad Property Group 

Vanguard Investments Australia 

• 

AustriA 

• CA Immobilien Anlagen 

• conwert Immobilien Invest 

• Immoeast 

• Immofinanz Immobilien Anlagen 

• Meinl European Land 

• Warimpex 

Belgium 

• Befimmo 

• Cofinimmo 

• Leasinvest Real Estate 

• Petercam 

Solvay Business School 

• 

CAnAdA 

• Presima (CDP Capital) 

Oxford Property Group 

• 

FinlAnd 

• Citycon 

• CREF Center for Real Estate 

Investment & Finance / Hanken 

• KTI Finland 

• Sponda 

FrAnCe 

• Acanthe Developpement 

• Affine 

• AXA REIM France 

• BNP Paribas 

• Dolmea Real Estate 

• E.M.G.P. 

• Foncìere des Régions 

• Gecina 

• Klépierre 

• Mercialys 

• Orco Property Group 

• Silic 

• Société de la Tour Eiffel 

• Société Foncière Lyonnaise 

• Société Générale 

• Unibail 

Université Paris Dauphine 

• 

germAny 

• Beiten Burkhardt 

• Colonia Real Estate 

• DB Real Estate Investment 

• Deutsche Euroshop 

• Deutsche Wohnen 

• DIC Asset 

• EBS Immobilienakademie 

• Heitman 

• HSH Nordbank 

• HypoVereinsbank 

IVG Immobilien 

• 

• PATRIZIA Immobilien 

• Rothschild 

• SEB Asset Management 

• TAG Tegernsee 

• Viterra 

• Vivacon 

• WestLB 

greeCe 

• Babis Vovos – International 

Construction Group 

Lamda Development 

• 

Hong Kong 

• Hongkong Land 

• University of Hong Kong, Dept. 

of Real Estate & Construction 

isrAel 

• Gazit-Globe 

itAly 

• Aedes 

• Beni Stabili 

• IGD 

• Pirelli & C. Real Estate 

• Risanamento 

netHerlAnds 

• ABN-AMRO Asset Management 

• ABP Investments 

• AMB Property Europe 

• Amsterdam School of Real Estate 

• BPF Bouwinvest 

• CB Richard Ellis 

• CITCO 

• Clifford Chance 

• Cordares Real Estate 

• Corio 

• Deloitte Real Estate 

• Doctors Pension Funds 

• Ernst & Young European 

Real Estate Group 

• Eurocommercial Properties 

• Fortis Investment Management 

• ING Real Estate 

• Kempen & Co 

• KPMG Accountants 

• LaSalle Investment Management 

• Loyens & Loeff 

• MN Services 

• NIBC Bank 

• Nieuwe Steen Investments 

• PGGM 

• Philips Pension Fund 

• PricewaterhouseCoopers 

• ProLogis 

• Redevco Europe Services 

• Rodamco Europe 

• Spazio Investment 

• SPF Beheer 

• VastNed Group 

• Wereldhave 

russiA 

• Eastern Property Holdings 

Sistema Hals 

• 

singApore 

• GIC Real Estate 

• Keppel Land 

• National University of Singapore, 

Dept. of Real Estate 

spAin 

• Inmobiliaria Colonial 

• Inmobiliaria Urbis 

• Metrovacesa 

• Renta Corporación Real Estate 

TESTA (Grupo Sacyr Vallehermoso) 

• 

sweden 

• Castellum 

switzerlAnd 

• Allreal Holding 

• CUREM 

• PSP Swiss Property 

• Sal. Oppenheim Real Estate 

• Swiss Prime Site 

Züblin Immobilien Holding 

• 

united ArAB emirAtes 

• Abu Dhabi Investment Authority 

united Kingdom 

• Allco Finance 

• AMP Captial Redding Investors 

• Asset Value Investors 

• Barclays Global Investors 

• BDO Stoy Hayward 

• Big Yellow Group 

• Berwin Leighton Paisner 

• British Land 

• Brixton 

• Cambridge Place IM 

• Capital & Regional 

• Cass Business School 

• Citigroup 

• Credit Suisse First Boston 

• Derwent Valley Holdings 

• Deutsche Bank 

• DTZ International 

• Eurocastle Investment 

• EuroHypo 

• Freeport 

• Goldman Sachs 

• Grainger Trust 

• Hammerson 

• Helical Bar 

• Henderson Global Investors 

• Hines Europe 

• HSBC Bank 

• Insight Foundation Property 

• JP Morgan 

• JP Morgan Cazenove 

Land Securities 

• 

• 

Lehman Brothers 

Liberty International 

• Linklaters 

• Lovells 

• Macquarie Capital Partners 

• Mapeley Estates 

• Merrill Lynch 

• Morgan Stanley 

• Morley Fund Management 

• Moody’s Investors Service 

• Nabarro Nathanson 

• Principal Global Investors 

• Quintain Estates & Development 

• Safestore 

• Schroders 

• Shaftesbury 

• Slough Estates 

• Speymill Group 

• Standard Life Investments 

• Thames River Capital 

• UBS Investment Bank 

• UK Balanced Property Trust 

• UK Commercial Property Trust 

• University of Cambridge, Dept. of 

Real Estate 

• University of Reading, 

Centre for Real Estate Research 

• Warburg Pincus 

• Westfield Group 

Workspace Group 

• 

usA 

• Archstone-Smith 

• AEW Capital Management 

• Cherokee INvestement Services 

• Cohen & Steers Capital Mgmt 

• European Investors 

• Fidelity Mgmt & Research 

• Forum Partners IM 

• Franklin Templeton Investments 

• GEM Realty Capital 

• ING Clarion Real Estate Securities 

• Kensington Investment Group 

• Mercury Partners 

• MIT Center for Real Estate 

• The Ohio State University 

• Taberna Realty Finance Trust 

• Real Foundations 

• Russell Investment Group 

• Simon Property Group 

• SNL Financial 

• The Tuckerman Group 

• The Wharton School, 

Zell-Lurie Real Estate Center, 

Univ. of Pennsylvania

CREDITS 

GUEST EDITOR 

Allan Saunderson, Property Finance Europe 

ARTICLE CREDITS 

Hans Bruggink, EPRA 

James Fetgatter, AFIRE 

Håkan Hellström, Castellum 

Dr . Wolfhard Leichnitz, IVG 

Christopher Luck, Nabarro Nathanson 

Harm Meijer, & Osman Malik, JP Morgan 

Alex Moss, AME Capital 

Terry Olin, Eastern Property Holdings 

DESIGN & LAYOUT 

LenShape | info@lenshape .nl 

Marek maakt… | mm@marekmaakt .nl 

PRINTING 

Smiet-Offset BV, Den Haag 

FROM EPRA 

Welcome to the 21 st edition of EPRA News . 

We are busy with the preparations for the 

8th annual conference to be held on 6 & 7 

September 2007 in the Hotel Grande Bretgne, 

Athens, Greece . The EPRA Executive Board, 

having selected the moderators and keynote 

speakers in conjunction with the EPRA Events 

Committee, are now looking to complete a 

series of questions that they want answering 

from attending the conference . The aim is to 

provide guidance and focus to the panel moderators 

. Incredibly, sponsorship continues to 

grow . We now have eight headline and 21 standard 

sponsors . This incredible level of support 

clearly means that the conference is well 

respected in the industry and members appreciate 

the work we are doing of their behalf . 

As always, we would like to encourage members 

to get involved with the publication and come 

forward with suggestions for contributions and 

articles . We must ensure the newsletter is both 

topical and interesting for the reader . 

Please send your comments and suggestions to: 

info@epra .com 

GUEST EDITOR 

April 2007, issue 21 

An apology for an unsuccessful communications policy . . . . . . . . . . . . . . . .4 

NEWS 

In the news . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 

FEATURES 

EPRA/Nabarro Nathanson Reception - London 2007 . . . . . . . . . . . . . . . . . . . . .8 

Towards Global Standards 

- the IASB Work Plan for 2007 and 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

Interview with Wolfhard Leichnitz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Broadening Investment Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

MARKET FOCUS 

European Property: Back to reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 

Pros and cons of Russian investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 

Global Mutual Funds Explode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 

Castellum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 

REFERENCE 

CONTENTS 

FTSE EPRA/NAREIT Global Real Estate Indices . . . . . . . . . . . . . . . . . . . . . . . . . .32 

Working Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 

Annual Conference 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

guest editor 

Allan Saunderson founded Property Finance 

Europe in early 2005, after several years working 

in structured finance and MBS with a consultancy 

company in Frankfurt, easetec ag. 

During the 1980s, he had been a Reuters 

financial journalist, and was appointed Chief 

Financial Correspondent, France, late in the 

decade - early enough however to encounter 

the Great Meltdown of equity markets in 

October 1987, leading both French and international 

reporting teams through it. 

In the early 1990s, Allan became Head of 

European Research for the Swiss private bank 

Julius Bär in Frankfurt, and in 1991 was 

appointed by the late French Prime Minister 

Pierre Bérégovoy to a committee advising the 

French Finance Ministry. In the late 1990s, 

Allan started his own monetary and economic 

consultancy for US and Anglo-Saxon investment 

management that eventually became 

Eurozone Advisors. For several years he was 

one of the leading European Central Bank 

watchers, appearing frequently in the press 

and on television. 

’ Contact 

Property Finance Europe 

Franklinstrasse 62 

60486 Frankfurt am Main 

Tel: +49 (0)69 719 189631 

Mobile: +49 (0)172 672 3938 

Fax: +49 (0)69 719 189659 

editor@pfeurope.eu 

www.pfeurope.eu 

epra news - april 2007 - www.epra.com 

By: Allan Saunderson 


An apology for an unsuccessful 


Allan Saunderson 

Managing Editor 


First an apology: Dear Chief Executive and/ 

or Communications Officer of large publicly-listed 

European real estate company*: I 

am very sorry for the irritated and, yes, 

sometimes rather rude email that I shot off 

to you sometime over the last two years. This 

happened after several hard day’s nights of 

writing and/or editing, trying to make head 

or tails of what the blue blazes you were 

trying to tell Property Finance Europe and 

therefore the world about Your Company. I 

will do better in future; I will invest the hourand-a-half 

plus umpteen unanswered telephone 

calls trying to reach your office to 

figure out what precisely you are trying to 

tell those who have invested hard-earned, 

highly-taxed income into Your Company. 

More to the point: I have never heard back. 

You never call. It is clear that my irritableemail 

strategy is dramatically unsuccessful. 

You are uninterested. You never want PFE to 

darken your email inbox again. Or you never 

look at emails. Probably all three. 

But a word in my defence, M’Lud. My message 

may have been tired and contained wording 

uncommensurate with your position, but it 

was well-intentioned: The difference between 

your share price being, say, €25 and €18, lies 

in being able to relate Your Company’s story 

to the world. Constantly and continuously 

and clearly. Remember that ‘equity story’ 

that the IPO investment banks and advisors 

told you about all those years/months/weeks 

ago? Well, now that you are launched down 

the shipway of corporate real estate life and 

afloat on the choppy and sometimes stormy 

oceans of the international capital markets, 

it needs to be continued, developed and 

extended. You can reliably assume that the 

American and the British fleets are well 

equipped. They have been a-live on the real 

estate ocean waves for many years now, and 

they have the linguistic winds in their sales, 

sorry ‘sails’. And the freshly rehulled Asian 

APREA fleet is hauling up fast on starboard 

bow, a strong and fair easterly a-booming in 

the spinnaker. 

Neither is your story-telling challenge 

around language - i.e. most of them are 

native English speakers and You are not. It IS 

about having a strategy; it IS about being 

prepared to explain it, and it IS also about 

math: When you want to place another 5m 

shares in your next rights issue, the difference 

in capital raised between having related 

Your Company story well and not having 

done so is, in the above case for example, 

€35 million. That covers a LOT of professional 

communications help. And the very best 

translator in town wouldn’t make a dent. 

Capital markets need Your Story in order to 

keep up. They come to their own conclusions 

anyway if left to their own devices. The best 

example of current market power is the 

biggest anomaly in European real estate 

right now: the dichotomy between the 

domestic German valuation for the nation’s 

property stock and the capital market valuation 

of same. The gap is most glaring in 

residential, but commercial exhibits a similar 

disconnect. Housing property can be purchased 

with a sitting tenant today in the 

average German city for €900-€1300 per sq. 

m. It can be sold into a quoted real estate 

company, or to third parties who take their 

valuations from the capital market, for 

€2,000-€3,000 per sq.m. Ask Floris van 

Dijkum from the Speymill Group, or Stephan 

Rind from Colonia, or Metehan Sen from 

Franconofurt, or Rainer Fuchs from Alta 

Fides, or Saul Goldstein from Cerberus, or 

Deutsche Wohnen’s Andreas Lehner, or 

Ralph Winter from Corestate Capital, or 

indeed, Matthias Moser from GAGFAH. And 

that is just for starters. In other words, the 

market is discounting, in true Anglo-Saxon 

capital market manner, a cycle that will take 

German property higher in value over the 

next few years, and it is overlooking the 

current domestic pricing. Purely national, 

‘retail’ buyers and sellers, on the other hand, 

remain pessimistic after 13 years of almost 

straight downturn in the housing market. 

The capital markets, in other words, need 

looking after. 

Capital market communication of the listed 

real estate story is not only a German challenge. 

The nation’s corporates and real 

estate professionals – albeit bringing up 

the rear in disintermediation and securiti-

sation – have generally taken the communications 

task long since into the linear work 

process. It is the German way. France is 

improving in leaps and bounds. The need 

for international capital in the 40-plus REIT/ 

SIICs launched over the last four years has 

made even the French communicate and, 

yes, even in English too. Ca roule très bien, 

ca! But Italian and Spanish property companies 

would still appear to have some way 

to go. As an outside observer, and avid consumer 

of the messages emanating from the 

southern real estate bastion of the EU, I 

sometimes scratch my head and wonder 

what companies are trying to say to foreign 

investors?. And then in English too where 

we are not strong? And you would think the 

Nordics would be fine communicators. 

Small populations and economies that have 

long had to communicate with the world 

beyond their borders as a matter of everyday 

international business life. But no. 

Wringing the company story out of a Nordic 

real estate listed entity is not a simple affair, 

and patchy at best. On the European continent, 

where Property Finance Europe is 

exclusively at work, real estate sectors in the 

centre and the east are perhaps the happiest 

communicators. At the moment though, 

their national story plots remain opaque 

and difficult for outsiders to comprehend. In 

many parts, legislation remains unclear, 

ownership relationships problematic, and 

capital market access is, for all manner of 

administrative and jurisdictional reasons, 

only very limited. 

Another aspect to capital market communication 

is of course free float. While a lot of 

real estate companies have been closely 

held in the past, the shareholder base is 

general widening in Europe– both because 

continental property companies are becoming 

more comfortable with small investors, 

and because, as in the French case for 

example, the ‘first flush’ of REIT legislation 

did not bring the hoped-for popular participation 

in property assets. The latest round of 

legislation however, ‘SIIC 4’, reformed the 

French REITs regime in a way aimed at 

democratising the shareholder base further. 

SIIC 4 aims at avoiding control by a single 

shareholder or concert parties where SIIC 

distributions are fully tax exempt. It imposes 

20% tax on dividends paid by French REIT/ 

SIICs to corporate entities that own more 

than 10% of capital but do not themselves 

have REIT status either in France or abroad. 

The measure targets SIIC ‘captives’, created 

by institutional investors solely for fiscal 

reasons. In particular, Spanish property 

companies and Luxembourg funds have, 

since France created REIT/SIICs in 2003, 

benefited from shareholder tax exemption. 

SIIC 4 boosts the required free float for SIICs 

to a minimum 40% of share capital, and 

15% prior to application for the status. It 

also provides a special exemption to encourage 

investment in hotel, café and restaurant 

property. SIIC 4 requires existing French 

REITs to reduce stakes held by single shareholders 

or concert groups to a maximum 

60% of equity capital from January 2009. It 

is effective immediately for all newly-created 

SIICs. In addition, companies will become 

eligible for the REIT/SIIC status only if they 

already exhibit 15% free float prior to IPO, 

with no one shareholder holding more than 

2%. Olivier Mesmin and Christine Daric from 

Baker & McKenzie in Paris note that failure 

to comply with the minimum 40% free float 

would make a SIIC liable to corporation tax 

under standard conditions, and the condition 

need to be met on a continuous basis. 

Exceptions are allowed for tender offerings, 

restructuring and bond conversions. And 

France is going to be monitoring how this 

happens now. Dorian Kelberg, director of 

the Paris-based Federation of Property and 

Land Companies, says: “The logic of SIIC 4 

comprises a strong signal for private individual 

investors to become shareholders, 

and our federation will, alongside the government, 

very closely follow what happens 

over the next two years or so.” In Germany, 

the passage of G-REIT legislation in late 

March by the Bundestag Parliament has 

raised great hopes for a sector that remains 

relatively hampered in its ability to provide 

internationally attractive indirect property 

vehicles. Rainer Riess, Managing Director of 

Deutsche Börse, says the first G-REIT flotations 

could take place as early as the second 

quarter, and sees volumes of individual flotations 

exceeding €700m. Many in the sector 

believe up to 30 IPOs could take place this 

year, some with asset bases as low as 

€100m. France was the first large European 

country to introduce REITs four years ago, 

though they have long existed in The 

Netherlands and Belgium and were introduced 

early in the decade in Bulgaria. The 

success of its SIIC model (Société 

d‘Investissements Immobiliers Cotée) convinced 

Britain and Germany to introduce 

REIT regimes. The Italian government also 

suddenly introduced a budget amendment 

allowing REIT structures, based on the 

French model. 

An apology for an unsuccessful 


Because of the speed with which real estate 

in Europe, west and east, is securitising into 

an investible asset class, it is hardly surprising 

that the attitude of many listed companies 

toward communications has not kept 

pace. This has to change. Even if the wave of 

money continues to break over global real 

estate, we/you are in a constant competion 

to attract it - across countries, across regions, 

against other asset classes, against other 

property investment vehicles. 

There are a few easy rules to follow - as our 

good friends Kurt Becker from Becker + 

Schreiner Communication in Germany, or 

Steve Hays at Bellier Financial in Amsterdam, 

or Dido Laurimore at Financial Dynamics in 

London - never cease to explain: Think 

through the core message that Your Company 

needs to communicate today; in Your 

Company’s working language, have someone 

write it who understands the fundamentals 

of what you are trying to do and to achieve 

strategically; have a good translator convert 

it into English, and prepare to release it 

simutaneously in both languages; do not 

even think of using English-speaking locals; 

do not use the CEO’s p.a. in between rushing 

between copier, telephone and Outlook 

Calendar; do not even think of doing-it-yourself. 

The message is the key; let it be clearly 

communicated and, yes, with a pinch of 

passion. This cannot harm. Do send a file 

attachment in your corporate identity as an 

Adobe PDF, and a body email text for backup, 

with clear callback numbers where, yes, 

someone is available who knows… And if 

you, Dear Chief Exec and/or Comms Officer 

are truly sensible and benificent, you will 

send all communications in clear, easilydigestible 

messages to news@pfeurope.eu 

- and persuade a tired and sometimes irritable 

editor that he is, yes, sometimes even 

Managing. $ 

* Several score names withheld to protect the justly 

accused. 

disclaimer: 

These are the views of the author and don’t 

necessarily reflect the views of EPRA. 

guest editor 

www.epra.com - april 2007 - epra news

news 

In the news 

APREA, EPRA and NAREIT Asian Roadshow 

Immediately after the conclusion of the 

APREA Property Leaders Forum in Ho Chi 

Minh City the chief executive officers of 

NAREIT, EPRA and APREA embarked on a 

roadshow through key Asian centres to 

promote the global listed real estate markets 

and the benefits of listed real estate as an 

investment class. 

This roadshow followed successful similar 

events the three undertook in Canada, 

Europe and the US late last year. This is the 

first such event to be held in Asia. 

They visited Tokyo, Seoul, Hong Kong, 

Singapore, Sydney and Melbourne in less 

than 2 weeks. Nikko Citigroup, JP Morgan, 

UBS and Macquarie Bank sponsored the 

events in, respectively, Japan, Korea, Hong 

Kong and Singapore and Australia. 

Overall, the CEOs spoke to many hundreds of 

institutional investors, property companies 

and fund managers both in open sessions 

and in one-on-ones. 

Their presentation focused on the latest 

EPRA research on the global listed real estate 

markets, recent developments in the US, the 

latest Ibbotson research conducted in the US 

on US, European and Asian listed real estate 

and the benefits of an allocation to listed 

EPRA Membership hits 19 

Membership numbers continue to rise. 

Since the last edition in December we 

have welcomed eleven new members. New 

members for this period are: Berwin, 

Leighton and Paisner, Moody’s Investor 

Services, Morley Fund Management and the 

UK Commercial Property Fund from the UK. 

From Continental Europe we welcomed: 


Peter Mitchell, CEO, APREA. 

real estate in a balanced portfolio and developments 

in Asia. 

The success of this first roadshow has encouraged 

the 3 organisations to repeat the 

venture next year, after the APREA forum in 

Macau. 

APREA, EPRA and NAREIT would like to 

express our thanks to the sponsoring banks 

and also to our steering committee, comprising 

Fran Thompson of FTSE, Ron Cheshire 

of Presima and Evan Gallagher of Allco 

Singapore. $ 

Patrizia Immobilien (Germany), Redevco 

(Netherlands), Renta Corporación (Spain), 

Sal. Oppenheim (Switzerland), Spazio 

(Netherlands) and Warimpex (Austria). The 

only non European member was Oxford 

Property Investors from Canada. A full membership 

list is located on page 2 of the newsletter. 

$ 

FTSE EPRA/NAREIT 

Investment Focus and 

Sectors Indices Launched 

In December last 

year we launched 

the investment focus 

& sector indices on 

the back of significant 

demand from clients. The introduction of the 

indices further enhances the global series 

offering investors the ability to slice and dice 

the market into focused parts. 

Classification by investment focus is based on 

revenue sources as disclosed in the latest 

published financial statement. Each constituent 

of the FTSE EPRA/NAREIT Global Index is 

classified as ‘Rental’ if 70%, or more of its 

total revenue is derived from rental income. 

If the rental income falls below the 70% 

threshold, the company is classified as ‘Non 

Rental’. 

The sector indices are broken down into nine 

specific property types. The classification is 

based on the gross invested book assets as 

disclosed in the latest published financial 

statement. The company is classified in one 

of the following sectors if 75%, or more, of 

its gross book assets are invested in one of 

the seven sectors below: 

• Healthcare 

• Industrial 

• Lodging/Resorts 

• Office 

• Residential 

• Retail 

• Self-Storage 

A company is classified as belonging to one 

of the two sectors listed below when its 

assets do not meet the 75% threshold for 

one of the seven property sectors above. 

• Diversified 

• Specialty 

Further details of the new series are available 

from www.ftse.com $

FTSE EPRA/NAREIT Global Index Rule Changes 

The FTSE EPRA/NAREIT regional advisory 

committees approved changes to the Size 

and Liquidity eligibility criteria in December 

2006 which became effective at the three 

regional quarterly reviews on 7 March 2007. 

The four main features of the new rules are: 

1 Minimum Size 

(a). A non-constituent company must have a 

free float market capitalisation above (see 

below) to qualify for the index: 

Asia 0.30% of regional free float mkt cap 

North America 0.10% of regional free float mkt cap 

Europe 0.10% of regional free float mkt cap 

(b). A constituent company must have a free 

float market capitalisation above (see below) 

to remain in the index: 

Asia 0.15% of regional free float mkt cap 

North America 0.05% of regional free float mkt cap 

Europe 0.05% of regional free float mkt cap 

2 Minimum Liquidity 

Companies are screened for liquidity on an 

annual basis in March. Each company will be 

tested for liquidity by calculation of its 

median daily trading per month. 

(a). A non-constituent which fails to turnover 

at least 0.05% of its free float shares in issue 

in at least ten of the twelve months prior to 

the review will not be eligible. 

(b). A constituent which fails to turnover at 

least 0.04% of its free float shares in issue 

for more than four of the twelve months 

prior to the review will not be eligible. 

(c). A new issue which does not have a 

twelve months trading record must have a 

three months trading record when reviewed. 

In order to qualify the company must turnover 

0.05% of its free float shares in issue, 

based on its median daily trade per month, 

in each month since listing. 

3 Relevant Real Estate 

Each eligible company must derive a 

minimum percentage of EBITDA from relevant 

real estate related activities. 

These percentages are: 

Asia 60% EBITDA 

North America 75% EBITDA 

Europe 75% EBITDA 

Reporting 

Eligible companies must produce a set of 

annual accounts in English. 

The full set of ground rules can be downloaded 

from www.epra.com $ 

ETFs Update 

Currently there are six separate Exchange Traded Funds (ETFs) based 

on the FTSE EPRA/NAREIT Global Real Estate Index series. The funds 

are listed on a range of exchanges including London Stock Exchange 

and Euronext. Three funds launched in Q4 complete the iShares Global 

real estate coverage and build on the back of their European Property 

Yield Fund launched at the end of 2005. The complete iShares and 

EasyETF range is (Reuters & Bloomberg codes in brackets): 

iShares FTSE EPRA/NAREIT Global Property Yield Fund (IWDP .L) (IWDP LN) 

iShares FTSE EPRA/NAREIT Asia Property Yield Fund (IASP .L) (IASP LN) 

iShares FTSE EPRA/NAREIT European Property Yield Fund (IPRP .L) (IPRP LN) 

iShares FTSE EPRA/NAREIT United States Property Yield Fund (IDUP .L) (IDUP LN) 

EasyETF FTSE EPRA/NAREIT Eurozone Fund (EEE .P) (EEE .FP) 

EasyETF FTSE EPRA/NAREIT Europe Fund (EEP .P) (EEP .FP) 

For more information please visit www.ishares.com and www.easyetf.com $ 

EPRA appoints Director of 

Reporting Practices 

EPRA is pleased to announce that Hans 

Bruggink was appointed Director of 

Reporting Policies. Hans began this role on 

2nd January 2007. He works on a part-time 

basis to support the Best Practices Committee 

in its effort to assist and monitor reporting 

practices of EPRA members with regards to 

IFRS, and further develop and improve the 

best practices recommendations. Amongst 

his priorities is the preparation of a survey 

for EPRA members to provide feedback on 

the activities, agenda and recommendations 

of the Best Practices Committee. In addition, 

Hans will undertake a project to assess the 

implementation of EPRA’s Best Practices 

Policy Recommendations in the 2006 edition 

of company annual reports. Furthermore he 

will focus on the impact of the convergence 

project of the IASB and FASB in co-operation 

with NAREIT. 

EPRA members are invited to direct all BPC 

matters to: 

Hans Bruggink 

Office phone +31204053830 

Direct phone +31204053841 

Fax +31204053840 

Email hans.bruggink@epra.com $ 

www.epra.com - april 2007 - epra news 

news

features 

EPRA/Nabarro Nathanson Reception 

- London 2007 

A partner of the firm since 1988, Chris advises 

quoted and unquoted real estate companies as 

well as funds and joint ventures. 

Chris is head of the firm’s REITs Group and has 

been closely involved in the development of 

UK-REITs including acting on REIT conversions. 

Chris’s experience also includes significant 

international and cross-border transactions. 

He is also a member of the firm’s European 

Group. 

’ Contact 

Email: c.luck@nabarro.com 


By Christopher Luck 

The panellists and hosts in good spirits before the discussion got underway. 

Chris Luck 

Partner, 

Corporate Real Estate 

In January the EPRA hosted its London reception at the offices of Nabarro Nathanson. The 

reception included a panel session which was chaired by Mark Cooper, editor of EuroProperty. 

The panellists were Francis Salway - Chief Executive of the Land Securities, Mike Slade - 

Managing Director Helical Bar, Peter Hicks – Head of IFA Channel International and Robert 

Fowlds – Managing Director of JP Morgan Cazenove. 

The panel discussed the launch of the UK 

Real Estate Investment Trust (UK - REIT). 

Nine UK publicly listed property companies 

converted to UK-REITs on 1 January 2007. 

These were Great Portland Estates, Land 

Securities, Hammerson, Primary Health 

Properties, Slough Estates, Brixton, Liberty 

International, British Land and Workspace. 

Details of the companies which converted 

are illustrated in Figure.1. These conversions 

resulted in UK REITs comprising 70% of the 

FTSE EPRA/NAREIT UK Index. As a point of 

reference, figure.2 highlights the REIT v Non- 

REIT breakdown amongst the countries in 

the FTSE EPRA/NAREIT Global Real Estate 

Index. On a global basis, REITs comprise 

approximately 70% of the free float market 

capitalisation of the index. 

The UK-REIT 

By way of general introduction a UK-REIT 

includes the following features: 

• 

• 

• 

• 

• 

the regime to is open to companies 

resident in the UK for tax purposes and 

which are listed on a recognised stock 

exchange; 

companies entering the regime do not 

pay any UK corporation tax on qualifying 

property rental income or any chargeable 

gains on a sale of qualifying property; 

there is a requirement to distribute at 

least 90 per cent of the profits from its 

property rental business to investors; 

entry to the regime is effected by a notice 

to HM Revenue and Customs; 

there is an entry charge which the company 

converting is required to pay of 2

• 

• 

• 

• 

• 

• 

• 

per cent of the value of the properties in 

the qualifying business or listing; 

UK-REIT must hold at least three separate 

properties (although large retail complexes 

etc. can count as multiple properties); 

no one property can represent more than 

40 per cent. of the total property value; 

at least 75 per cent. of the company’s 

business must be a ‘property rental business’ 

by reference to profits and value; 

a UK-REIT can carry on other activities in 

its residual business; 

owner occupied property is outside the 

ring fenced business going forward; 

distributions for the tax exempt business 

are generally subject to a 22% withholding 

and some recipients will be able to 

claim all or part of this back depending 

on their tax status; and 

the regime is a tax regime and commenced 

from 1 January 2007. 

There are also restrictions on the UK-REIT 

paying dividends or other distributions to 

any corporate person interested in 10 per 

cent or more of its distributions. The amount 

of borrowings a UK-REIT can have is also 

restricted. Breach of these restrictions does 

not cause a loss of UK-REIT charge status but 

can give rise to a tax charge for the UK-REIT. 

UK-REITs can also hold European assets but 

the tax position will depend on how the 

assets are held. 

Reception Discussion 

The launch of the UK-REIT was considered at 

the EPRA reception to be a significant success 

both in terms of the companies which elected 

to join the regime, or have announced their 

intention to do so. It was also the view that 

the launch of the UK-REIT was an example of 

the real estate sector in the UK having 

achieved a constructive dialogue with the 

HM Treasury through the British Property 

Federation, Investment Property Forum and 

Royal Institute of Chartered Surveyors (RICS). 

This process had been further reinforced by 

individual campaign submissions and 

support from advisors across the sector as 

well as other influential bodies such as EPRA 

itself. 

There are some areas where more can be done 

such as proposed changes to make it easier to 

launch new UK-REITs and to encourage property 

held in offshore structures or operating businesses 

to be unlocked as part of the commercial 

real estate investment market. There are transfers 

and other taxes as well as the entry charge 


- London 2007 

Figure 1 Free Float Dividend Free Float Country 

Company Weighting Yield Mkt Cap (EUR) Weight Status 

Land Securities Group 100,00% 2,26% 14.065 20,26% REIT 

British Land Co 100,00% 1,14% 11.342 16,33% REIT 

Hammerson 100,00% 1,26% 6.700 9,65% REIT 

Liberty International 100,00% 2,38% 6.481 9,33% REIT 

Slough Estates 100,00% 2,37% 5.192 7,48% REIT 

Derwent London 100,00% 0,63% 3.256 4,69% 

Brixton 100,00% 2,31% 1.969 2,84% REIT 

Great Portland Estates 100,00% 1,46% 1.790 2,58% REIT 

Quintain Estates and 

Development 

100,00% 1,17% 1.697 2,44% 

Capital & Regional 100,00% 1,18% 1.577 2,27% 

Shaftesbury 100,00% 0,68% 1.504 2,17% 

Workspace Group 100,00% 0,78% 1.242 1,79% REIT 

Unite Group 100,00% 0,49% 914 1,32% 

Minerva 100,00% 0,83% 912 1,31% 

Grainger 75,00% 0,88% 907 1,31% 

St.Modwen Properties 75,00% 1,43% 862 1,24% 

Big Yellow Group 75,00% 0,77% 809 1,16% 

Assura 100,00% 2,45% 695 1,00% 

Invista Foundation 

Property Trust 

100,00% 3,80% 691 0,99% 

Mapeley 40,00% 3,76% 652 0,94% 

Helical Bar 100,00% 0,88% 598 0,86% 

F&C Commercial Property 

Trust 

40,00% 4,07% 581 0,84% 

CLS Holdings 75,00% 0,00% 578 0,83% 

ING UK Real Estate Income 

Trust 

100,00% 2,29% 577 0,83% 

UK Balanced Property Trust 100,00% 4,90% 407 0,59% 

UK Commercial Property 

Trust 

30,00% 0,00% 402 0,58% 

Daejan Hdg 30,00% 1,11% 392 0,56% 

Development Securities 100,00% 1,01% 359 0,52% 

Plaza Centers NV 40,00% 0,00% 320 0,46% 

Invesco Property Income 

Trust 

100,00% 5,27% 279 0,40% 

Westbury Property Fund 100,00% 3,35% 261 0,38% 

Teesland Advantage 

Property Inc Tst 

100,00% 5,10% 237 0,34% 

Freeport 100,00% 0,68% 224 0,32% 

Standard Life Inv Prop Inc 

Trust 

100,00% 5,16% 192 0,28% 

Mucklow (A.& J.) Group 40,00% 2,83% 170 0,24% 

ISIS Property Trust 2 Ld 75,00% 4,86% 169 0,24% 

Primary Health Prop. 100,00% 2,90% 165 0,24% REIT 

Marylebone Warwick 

Balfour Group 

50,00% 0,00% 146 0,21% 

ISIS Property Trust Ld 75,00% 4,62% 126 0,18% 

UK Total 1,74% 69.440 100,00% 

Source: FTSE EPRA/NAREIT Global Real Estate Index, 19 March 2007 

to take into account which may slow down new 

UK-REITs or even prevent them happening. 

It was also acknowledged that UK-REITs 

could fit comfortably alongside other listed 

and unlisted real estate companies and vehicles. 

Indeed REITs may be acquirers of prop- 

erties from the others and vice versa and 

carry out joint ventures together. The panel 

also discussed how REITs create a liquid tax 

effective wrapper for owning real estate but 

do not change the underlying need for management 

and assets which produce the 

expected yields. % 

features 

www.epra.com - april 2007 - epra news

features 

Nick van Ommen and Mike Slade. 

Figure.2 Mkt Cap (EUR) Mkt Cap (EUR) 

REITs Non-REITs Total % REITs % Non-REITs 

Australia 71.604 2.914 74.518 96,1% 3,9% 

Hong Kong 4.474 51.269 55.743 8,0% 92,0% 

Japan 23.097 68.460 91.556 25,2% 74,8% 

New Zealand 605 - 605 100,0% 0,0% 

Singapore 6.919 9.148 16.067 43,1% 56,9% 

Total 106.698 131.792 238.490 44,7% 55,3% 

Austria - 11.985 11.985 0,0% 100,0% 

Belgium 2.971 - 2.971 100,0% 0,0% 

Denmark - 551 551 0,0% 100,0% 

Finland - 2.043 2.043 0,0% 100,0% 

France 20.480 1.444 21.924 93,4% 6,6% 

Germany - 7.011 7.011 0,0% 100,0% 

Greece 127 893 1.020 12,5% 87,5% 

Italy - 3.401 3.401 0,0% 100,0% 

Netherlands 11.278 - 11.278 100,0% 0,0% 

Norway - 623 623 0,0% 100,0% 

Poland - 1.390 1.390 0,0% 100,0% 

Spain - 366 366 0,0% 100,0% 

Sweden - 7.263 7.263 0,0% 100,0% 

Switzerland - 3.643 3.643 0,0% 100,0% 

UK 48.947 20.493 69.440 70,5% 29,5% 

Total 83.804 61.105 144.910 57,8% 42,2% 

Canada 17.173 6.086 23.259 73,8% 26,2% 

United States 270.897 8.530 279.427 96,9% 3,1% 

Total 288.070 14.616 302.686 95,2% 4,8% 

10 epra news - april 2007 - www.epra.com 


- London 2007 

The panel also predicted the growth of funds 

which specialise in REIT investment for retail 

investors to access real estate as a listed 

asset class. In this regard it was thought that 

REITs may over time develop into a more 

sector focused vehicle allowing fund managers 

to switch form one sector of the market 

to another without having to hold diversified 

Source: FTSE EPRA/NAREIT Global Real Estate Index, 19 March 2007 

positions. However, it was also believed that 

there is room for diversified REITs. 

In conclusion the reception was bullish on 

UK-REITs and the opportunities they present. 

As part of this general development of the 

REIT sector the FTSE Group has created the 

FTSE EPRA / NAREIT UK REITs Index and an 

FTSE EPRA/NAREIT UK Non-REITs Index. $ 

About Nabarro 

Nabarro is a leading UK law firm. We 

work from offices in London, Sheffield 

and Brussels, drawing on longstanding 

relationships with a network of selected 

firms worldwide for our cross-border 

work. Our no-nonsense approach and 

wide-ranging expertise help clients 

achieve their objectives across many 

sectors, both public and private. 

Our commitment to clarity is revealed in 

our understanding of clients’ objectives, 

our capacity to shed light on complex 

legal issues and the straightforward, 

unequivocal nature of our advice. Our 

culture is open; our people practical 

and engaging. 

Our client-focused approach drives an 

emphasis on key industry sectors, 

including education, energy, financial 

services, gaming & leisure, public sector, 

healthcare, housebuilders, real estate, 

retail, technology and waste. Supporting 

these groups are a full range of practice 

area specialists from construction, corporate, 

dispute resolution, employment, 

environment, EU & competition, finance, 

health & safety, IP, pensions, projects, 

restructuring & insolvency, technology 

and tax. Many of our lawyers are rated 

as foremost experts in their particular 

fields, having won accolades and awards 

for their skills from the principal industry 

commentators and legal publishers. 

For more information visit our website 

at www.nabarro.com

After its focus on first time application of IFRS in many countries in 2005, the IASB will 

now strive to create a stable reporting platform that will remain unchanged until 2009. In 

the meantime, the Board will continue to present many Discussion Papers (DP), Exposure 

Drafts (ED) and amend and new Standards. In view of convergence with US-GAAP these 

will undoubtedly have a true world wide impact. Therefore, the EPRA Best Practices 

Committee will coordinate initiatives towards the standard setters with other industry 

bodies, such as NAREIT, APREA, BPF and RealPac. In this article we provide an overview 

of the IASB Active Agenda. 

Work Plan 

The Memorandum of Understanding 

between the IASB and FASB set the goals 

for 2008. This so called “short-term convergence” 

target is to complete work in a limited 

Hans Bruggink 

Director of Reporting 

Practices 

Hans Bruggink started his career as an auditor 

for Price Waterhouse Coopers. He joined KLM 

Royal Dutch Airlines in 1975 and was Chief 

Internal Auditor and EVP/Corporate Controller 

until 1999. Thereafter, he continued his financial 

career as CFO of a number of Dutch Companies. 

As a project-manager and consultant, he carried 

out IFRS implementation projects for Buhrmann 

and Endemol, during 2003 and 2004. 

Hans has served on several non-executive 

boards, such as Kenya Airways, MECC 

Maastricht Exposition and Congress Centre and 

SPF Beheer. In addition, he was chairman of 

the IATA Accounting Standards Committee. 

He was born in 1947 and is a Dutch Registered 

Accountant (RA). 

EPRA members are invited to direct all BPC 

matters to: 

Hans Bruggink 

Office phone: +31204053830 

Direct phone: +31204053841 

Fax: +31204053840 

Email: hans.bruggink@epra.com 

By Hans Bruggink 


- the IASB Work Plan for 2007 and 200 

number (10) of standard-setting projects, of 

which areas such as Borrowing costs, Joint 

ventures, Fair value options and Investment 

properties are important for the real estate 

industry. KPMG advisors Hans Grönloh and 

Machiel Hoek informed you about the IASB 

activities in these areas in the previous 

edition of EPRA News. However, there is a 

list of 11 additional areas of focus that are 

considered joint projects under the MoU, 

that have goals and milestones for 2007 and 

2008 on the active agenda and the research 

program of the IASB. On top of this, the 

IASB intends to continue work on the so 

called Conceptual Framework, on some 

additional projects and on Amendments to 

Standards. 

OThER cONvERGENcE PROjEcTS 

Fair value 

The fair value measurement project in this 

list aims at: 

(a) establishing a single source of guidance 

in one IFRS for all measurements 

required by IFRSs; 

(b) including a definition of fair value, and; 

(c) enhancing disclosures about fair value. 

The IASB has recently issued a Discussion 

Paper on Fair Value Measurements. The 

Board decided to use the recently issued 

SFAS 157 as the starting point for its paper. 

SFAS 157 contains a single definition of fair 

value and a framework for measuring fair 

value for financial reports. The IASB invites 

comments on the discussion paper by 4 May 

2007. When the responses have been considered 

the IASB plans to publish an exposure 

draft of an IFRS on fair value measurements 

in 2008. 

Financial Statement Presentation 

This project is split into three phases: 

(a) addressed what constitutes a complete 

set of financial statements and requirements 

to present comparative information. 

The IASB and FASB completed 

deliberations on this phase and an ED 

was issued; 

(b) (current) to address more fundamental 

issues for presentation of information 

on the face of the financial statements; 

(c) (pending) to address interim financial 

reporting. 

Contrary to FASB, which will combine 

exposure of its phase A and B decisions, 

the IASB decided to issue a phase A 

Exposure Draft: Proposed Amendments to 

IAS 1 Presentation of Financial Statements: 

A revised Presentation. The ED dated March 

2006 triggered 130 comment letters from 

constituents. Proposed changes however 

are not very significant and to some extent 

purely cosmetic such as the title changes 

and many amendments of the wording in 

the body of IAS 1. The title changes of the 

statements are even optional, as well as 

the option to present recognised income 

and expense in a single statement or in two 

statements (the first one displaying components 

of profit or loss and the second one 

components of other recognised income and 

expense. As in US-GAAP, the ED required an 

additional Statement of Financial Position 

(Balance Sheet) at the beginning of the two 

year period, as well a separate Statement 

of Changes in Equity. The Statement of 

Changes in Equity will disclose all owner 

related changes in equity. 

As a result of the comments, the IASB tentatively 

decided that the statement of financial 

position at the beginning of the comparative 

period should be required only when it contains 

a reclassification or restatement. The 

Board also decided to change the title of the 

“Statement of recognised income and 

expense” non-mandatory to “Statement of 

Comprehensive Income” to converge with 

the US terminology. % 

features 

www.epra.com - april 2007 - epra news 11

features 



- the IASB Work Plan for 2007 and 2008 

Several illustrative model statements are 

included in the ED and will affect the best practices 

presentation of EPRA members’ financial 

statements when effective. In due time EPRA 

Best Practices Policy Recommendations will be 

updated to represent the requirements of the 

amended IAS 1. However we feel that the 

impact of phase B will be of more significance. 

Phase B topics include: 

1. Principles for aggregating and disaggregating 

information; 

2. Defining totals and subtotals to be 

reported; 

3. Decisions about recycling components 

of other comprehensive income/ other 

recognised income and expense to 

profit or loss; 

4. Converging FASB 95 Statement of Cash 

Flows and IAS 7 Cash Flow Statements 

including the use of the direct, or indirect 

method; 

5. Cohesiveness of the Financial Statements; 

6. Classification guidelines and related 

disclosures. 

Discontinued Operations 

As part of the Financial Statement 

Presentation project, the Boards decided to 

review the presentation of discontinued 

operations. 

Statement SFAS 144 states that results from 

discontinued operations include gains and 

losses at the level of a component of an 

entity (an asset group). This is defined as the 

lowest level for which identifiable cash flows 

are largely independent of the cash flows of 

other groups of assets and liabilities. The 

statement does not include a significance 

concept. IFRS 5 states that a component of 

an entity when discontinued should be 

reported as a discontinued operation when it 

represents a separate major line of business 

or geographical area of operations. The FAS 

and IAS Boards intend to converge their definitions 

in short term. 

In its meeting of 24 January 2007, FASB 

reviewed its definition of discontinued operations, 

following an agenda request from 

NAREIT, supported by EPRA. The FASB 

approved the recommendation that component 

dispositions should only be reported as 

discontinued operations if the assets represent 

an “operating segment”. This will be a 

significant improvement for our industry. 

In the IASB meeting on 25 January, the discussion 

tentatively supported the level of 

Figure 1 provides an outline of the IASB Agenda in these fields, with planned output in 2007 and 2008: 

Topic Milestone output 

Other convergence projects: 

- Business combinations converged standard IFRS 

- Consolidations towards converged standard DP & ED 

- Fair value measurement converged guidance DP & ED 

- Financial statement presentation 

Phase A ED issued in 2006 IFRS 

Phase B due process documents DP & ED 

- Revenue recognition due process documents DP & ED 

- Post-retirement benefits due process documents DP & ED 

- Leases Agenda decision DP 

Conceptual Framework: 

- Phase A: Objectives and qualitative characteristics 

- Phase B: Elements, recognition and measurement DP 

- Phase C: Measurement 

- Phase D: Reporting entity 

- Phase E: Presentation and disclosure 

- Phase F: Purpose and status 

- Phase G: Application to not-for-profit entities 

- Phase H: Finalisation 

Other projects: 

- Small and medium-size companies ED & IFRS 

- Insurance contracts ED 

- Liabilities IFRS 

- Emission trading schemes 

Amendments to standards: 

- Financial instruments (IAS 32) IFRS 

- Earnings per share (IAS 33) ED & IFRS 

- First-time adoption (IFRS 1) ED & IFRS 

- Share-based payment (IFRS 2) IFRS 

- Related party disclosures (IAS 24) ED & IFRS 

DP: Discussion Paper; ED: Exposure Draft; IFRS: Reporting Standard. 

“operating segment” as defined in IFRS 8, 

for discontinued operations on the face of 

the Statement of Comprehensive Income. 

Below this level, disclosures would be 

required in the Notes. 

conceptual Framework. 

The conceptual framework project not only 

aims at converging the existing IASB and 

FASB respective conceptual frameworks, but 

also at removing some weaknesses, by 

updating and refining them. The first of a 

series of Discussion Papers (Phase A) was 

issued in 2006. The draft chapters define the 

objective of financial reporting, and the 

qualitative characteristics of decision-useful 

financial information. The document also 

identifies relevance, faithful representation, 

comparability (including consistency) and 

understandability among the characteristics 

of financial information that make it decision-useful. 

The second Discussion Paper 

(Phase B) is expected in Q2. 

Altogether, the project is divided in eight 

phases. Critics mention the concern that final 

documents will be issued before purpose and 

status of the framework (Phase F) is determined. 

We therefore suggest that our members 

study and comment on the coming Exposure 

Drafts and communicate their findings to IASB 

and to the EPRA Best Practices Committee. 

The EPRA Best Practices committee 

In view of all IASB and FASB activities, the BPC 

intends to conduct a member survey, in which 

it will invite members to provide feedback on 

the activities, the agenda, and recommendations 

of the Committee. In this questionnaire 

we will ask you to give your opinion and comments 

on proposed policies, issues and topics 

in order to enable the BPC to set priorities for 

its discussions with standard setters together 

with the other industry representatives. EPRA 

will also ask you to indicate topics for further 

refining and expanding the set of Best Practices 

Recommendations. $

Dr.-Ing. Wolfhard 

Leichnitz 

Chief Executive Officer 

IVG Immobilien AG 

Dr.-Ing. Wolfhard Leichnitz (born 1952) 

Chief Executive Officer IVG Immobilien AG 

Responsible for the Caverns business, 

Communications/Marketing and Human 

Resources. 

Holds a business degree and doctorate. 

17 years of real estate industry experience. 

Within IVG group since June 2006. 

Previous positions: 

1992 - 2000 Member of the Board of Hochtief AG 

2001 - 2005 Chief Executive Officer of Viterra AG 

FH: how and why did you decide to get 

into real estate? 

As a civil engineer by education, real estate 

was always a close choice. Apart from that, I 

view real estate as a very exciting field: residential 

real estate, commercial real estate, 

infrastructure projects, etc. I could not think 

of another industry that offers so much 

insight into varying parts of the economy. 

FH: just under 50% of IvGs total assets 

under management are in Germany. 

Do you intend to expand further outside 

Germany in the future? 

With our own investments we are re-focussing 

on Germany right now as we do see an 

attractive relationship between investment 

prices and economic outlook. Therefore, for 

our own balance sheet the investment share 

outside Germany will not increase in the 

near future. However, the picture is different 

in our funds business. Here we are increas- 

By Fraser Hughes 

Interview with Wolfhard Leichnitz 

EPRA Best Performer Large cap Award Winner 2005, sponsored by LaSalle Investment Management 

Foster’s Swiss RE Tower, London. 

ing our investment share not only outside 

Germany, but also outside Europe. 

Fh: When you joined IvG what were the first 

things that you felt needed to be carried out? 

When I took over last summer I inherited a 

company that was well positioned in the 

markets – in terms of track record and reputation. 

So there was no need for a turnaround. 

However, I believe a strategic step towards the 

goal of profitable growth is due. 

FH: What do you envisage for the German 

market over the next five years in terms of 

opportunities? 

To be clear: The German real estate market is 

not a bonanza, but it offers opportunities to 

the longer term investor like IVG. I believe 

that the German economy is on a slow, but 

steady, growth path. Over the course of time 

this will filter down to market fundamentals 

like rents and vacancy rates. % 

features 


features 

Interview with Wolfhard Leichnitz 

EPRA Best Performer Large Cap Award Winner 2005, 

sponsored by LaSalle Investment management 

Airrail project at Frankfurt’s Rhein-Main Airport. 

FH: how do you view the introduction of 

G-REITs? Do you think it will make the 

German market more attractive for investors 

both at home and abroad? 

Regarding the financial implications: Like it or 

not, REITs are the worldwide industry standard 

for quoted real estate. Any jurisdiction that lags 

behind too long will divert capital away from 

its real estate market. Regarding the political 

debate on REITs, everybody realizes that climate 

change is already here, and a growing issue 

around the world. I believe that real estate that 

is professionally managed by quoted companies 

like REITs has responsibility for environmental 

issues such as sustainable energy use. 

FH: how do you see the European office 

markets developing over the course of the 

next three years? 

I am optimistic but I don´t envisage a fundamental 

change in the shape of the European 

investment map. The “investment frontier” 

has already moved eastward to the new EU 

member states and pushes onward to 

Moscow. We will see further stabilization of 

these emerging real estate markets. 

FH: how has your shareholder structure 

changed over time in terms of the nationality 

of investors? 

IVG has had an international shareholder 

basis for many years. More specifically, over 

the last 2-3 years, we have seen an increase in 

the number of UK and US investors. It reflects 

the growing interest of Anglo-American investors 

in European real estate in general and 

especially in IVG´s equity story. 

FH: Do you see a broader range of investors 

now looking to invest in listed real 

estate, not only dedicated investors? 


Yes, I am thinking of private individuals that 

are investing for their retirement. In the past 

much of this money had been directed 

towards the traditional German open-ended 

real estate funds. In my view these investors 

are now ready to add quoted real estate to 

their portfolios. 

FH: In your time in the business, which 

deals/projects have given you the most 

satisfaction? 

I find project development a very exiting and 

satisfying part of our industry as it shapes the 

future. That is especially true with airport 

projects. I am talking about the aviation infrastructure 

itself for which I was responsible 

during my time at the construction company 

Hochtief. In addition, I am fascinated by nonaviation 

real estate like our current Airrail 

project at Frankfurt´s Rhein-Main airport. 

Landmark deals such as the purchase of 

Wolfhard Leichnitz accepts the Best Large Cap 

Performer Award 2005 presented by Ernst Jan de 

Leeuw of LaSalle Investment Management. 

Foster´s Swiss Re Tower/”Gherkin” in London 

are milestones along the road. 

FH: Looking back, do you have any regrets? 

I guess it was Frank Sinatra who gave the 

legendary answer to that question: … I have 

a few, but not enough to mention….. 

FH: When you look at other property 

companies in Europe, who do you most 

admire and why? 

Our pan-European approach does not have 

many peers. In terms of professionalism the 

UK companies are our peer group – and with 

the new group structure we are currently 

implementing IVG plans to score well within 

this group. 

FH: What do you do in your spare time? 

I play golf. $ 

About IVG Immobilien AG 

March 2007 

IVG Immobilien AG is a quoted European 

real estate investment company that 

manages €18 billion of real estate assets 

in its Investment, Development, Funds, 

and Caverns business areas. 

Its investments focus on office properties 

in major European cities. IVG uses its 

branches to successfully leverage market 

opportunities on location and generate 

attractive returns for its investors.

Broadening Investment Strategies 

Intro 

James A. Fetgatter is Chief Executive of the 

Association of Foreign Investors in Real Estate 

Text (AFIRE), a position he has held since 1992. 

AFIRE is a not-for-profit association formed in 

1989 whose members are foreign institutions 

who have a common interest in investing in 

the US property market. He has guided the 

growth of the association from a small group 

of Dutch pension funds to an organization of 

over 180 investors from 17 countries. 

Prior to his appointment as Chief Executive, 

Mr. Fetgatter spent 15 years in various aspects 

of the real estate industry. His last two positions 

prior to joining AFIRE were with Dutch 

and UK investment and development companies. 

Mr. Fetgatter served as an officer in the United 

States Navy and holds a Master in Business 

Administration from Harvard University and a 

BS from Oklahoma State University. 

’ Contact 

James A. Fetgatter 

Chief Executive 

AFIRE 

1300 Pennsylvania Avenue 

Washington, DC 20004 

Phone: 202 312-1400 

Fax: 202 312-1401 

E Mail: JAF@AFIRE.ORG 

James A. Fetgatter 


AFIRE 

Washington, DC 

The Association of Foreign Investors in Real Estate (AFIRE) international investor members 

continued to broaden their allocation of investment funds around the world and adopt 

innovative strategies to more easily acquire real estate within the most competitive markets. 

While the US remained the most dominant single market for investment, India ranked highly 

as a place for capital appreciation. And while the US is perceived to be a difficult place to 

acquire real estate, the number of respondents who say it is “very difficult” has decreased 

for the past three years. This article summarizes some of the key findings from the 15 th 

annual AFIRE Investment Survey. The survey reflects the attitudes of the members of the 

AFIRE who collectively own $600 billion of real estate globally and $185 billion in the US. 

he results of this year’s survey mani- 

“Tfest the most global viewpoint our 

members have ever expressed,” said Mark 

Preston, president of Grosvenor UK and 

Ireland, and AFIRE’s chairman. “The US 

remains the strongest and safest conduit for 

cross-border real estate capital, by a substantial 

margin - 63%. But it is clear that our 

members are taking advantage of some of 

the opportunities inherent in emerging 

markets.” 

Global Outlook 

London remained the top global city for 

foreign investors for the second year in a 

row. For the first time, New York City was 

ranked as number two and supplanted 

Washington, DC in that spot. The re-emergence 

of New York City was the theme of the 

AFIRE 2007 Winter Conference in February 

entitled, New York City: Five Years After. 

Former Mayor Rudy Giuliani, addressing the 

AFIRE members, called New York City the 

“capital of the world” primarily due to the 

various nationalities living there. Washington, 

DC fell to fourth place behind Paris. The cities 

of Munich, Stockholm and Moscow made 

strong showings this year by moving up the 

rankings in significant leaps. 

Figure 1: Top 5 Global Cities for Real Estate Investment - 2006 

London 

New York City 

Paris 

Washington D.C. 

Tokyo 

23 

24 

25 

By James Fetgatter, AFIRE 

While the US ranked the highest as the 

most stable and secure country for their 

investments, the US met with significant 

competition for the country with the best 

opportunity for capital appreciation. In a 

surprise showing, India ranked a very close 

second to the US with China following closely 

behind. Germany and Russian formed a 

second tier of high ranking countries in this 

category. 

In Asia, the most popular countries for 

investment are Japan, China and India. While 

Japan and China have been ranked highly in 

Asia for the past several years, India jumped 

ahead of several other countries this year 

into third place. In Eastern Europe, the Czech 

Republic and Poland are the two most 

popular venues and rank far above the other 

countries. Hungary declined in the investors’ 

perception while Romania made a dramatic 

new showing. 

While foreign investors are broadening their 

perspective on global real estate, they still 

have approximately one half of their existing 

investments in the US. Fully 90% of their 

portfolios are distributed among the US, 

Western Europe and the UK. Offices are the % 

0 5 10 15 20 25 30 35 40 45 

Score 

50 

43 

48 

features 


features 

25% 

20% 

15% 

10% 

5% 

0% 

60% 

50% 

40% 

30% 

20% 

10% 

Least attractive Most attractive 

0% 

Figure 2: Countries Providing the Best Opportunity for Capital Appreciation - 2006 

preferred product type of the international 

investor comprising approximately 50% of 

their portfolios. Retail is the second most 

favored product type. 

US Not So Difficult 

Two years ago, 60% of the foreign investors 

said it was “very difficult” to find attractive 

real estate investments in the US. Today, only 

37.5% say it is “very difficult”. What has 

made the difference in the past two years? 

Have foreign investors merely given up on 

finding opportunities in the US? 


USA India China Germany Russia 

Figure 4: Attractiveness of USA Real Estate Investment Property Types 

2003 

2005 

5 

2004 

2006 

4 

3 

2 

1 

0 

23% 

18% 

15% 

The median planned acquisitions for 2007 

per survey respondent show an increase of 

43% over their 2006 actual transactions on a 

global basis. Their targeted acquisitions for 

the US show a median increase of 53% over 

2006 actual levels. As is the case for 2006, 

they plan to invest half of their capital into 

the US. Clearly they are not backing away 

from the US market. What is going on then? 

In general, it appears that the foreign investor 

is willing to take on slightly more risk in 

the US market. Value-added real estate now 

Figure 3: Percentage of Respondents Finding It “Very Difficult” to Find Attractive US RE Opportunities 

2.9 

3.1 

37.7% 

59.4% 

51.5% 

10% 

Year 

2003 2004 2005 2006 

3.5 

3.7 

By James Fetgatter 

AFIRE 

3.2 3.2 

2.9 

3.6 

makes up 25% of their strategy for 2007. Five 

years ago this category did not exist in their 

responses and “core” investments made up 

70% of their targeted acquisitions. Today, 

core makes up only 40%. 

This new willingness to take on slightly more 

risk is being achieved by adding new property 

types to their portfolios. New property 

types were listed by 30% of the respondents 

as a part of a new US investment strategy. 

These new products include infrastructure, 

resorts, senior housing, and research and 

science parks. Development was advocated 

by 20%. A number of firms indicated new 

financial strategies such as entity level acquisitions. 

The members are employing several measures 

to successfully place capital into the 

US. By far the most popular strategy is developing 

relationships with local real estate 

firms to acquire off-market properties. 

A further extension of this strategy and one 

employed by almost a third of the respondents 

is to develop joint venture relationships 

with local firms. 

Among the traditional product types, offices 

are a clear favorite. US offices have 

experienced a steady rise from the bottom of 

the charts four years ago to capture the 

number one preference two years in a row. 

In an even more dramatic turnaround, multifamily 

housing is the second favorite product 

in the US, bouncing from last place one year 

ago. And in the reverse role, US retail 

plummeted to the least favorite product type 

from the number one position two years 

ago. These changes in product preferences 

illustrate the dynamics of the US market and 

the flexibility of the foreign investor’s 

strategies. 

Office Multifamily Hotel Industrial Retail 

8% 

37.5% 

3.1 3.1 3.2 

3.0 2.9 2.8 

3.2 

2.9 

3.3 

3.2 3.2 

2.8

Top US cities 

The re-emergence of New York City to capture 

the favorite city for real estate investment in 

the US is a remarkable story. Five years have 

gone by since the 9/11 tragedy nearly crippled 

New York City’s economy and shook the confidence 

of the entire nation. Lower Manhattan 

experienced an exodus of corporate tenants 

seeking safety and available space, while 

Midtown Manhattan real estate rebounded in 

the wake of their displacement. The resilience 

of the New York City economy has proven itself 

as major foreign and domestic investors continue 

to make significant bets on it. 

Washington, DC, the most favored city for five 

years, is now in second place, albeit a close 

second to NYC. Los Angeles and San Francisco 

complete the top four choices. While many 

other cities received favorite votes, no other 

city came close to these four. In summary, it 

appears that foreign investors have a preference 

for coastal cities in a bi-coastal strategy. 

The two on the East Coast (New York City and 

Washington, DC) and two on the West Coast 

(Los Angeles and San Francisco). The cities of 

Seattle and Phoenix, while clearly not within 

the top four, experienced strong gains in the 

past couple of years. 

coming to America 

German investors have supplied the bulk of 

the most active foreign investors in the US for 

the past five years. Beginning in 2005, this 

dominant position was overtaken by 

Australian investors and to a (slightly) lesser 

extent with Middle Eastern investors. The 

latest data on sources of foreign capital for 

the year 2006 is from Real Capital Analytics, 

a NYC-based research firm. 

Figure 6: Foreign Investment Sources US - 2006 

European 

9% 

German 10% 

Canada 13% 

UK 5% 

Pac Rim 16% 

Source: Real Capital Analytics 

Other 1% 

Mid East 27% 

Australia 19% 

Figure 5: Top 5 US Cities for Real Estate Investment - 2006 

New York City 

Washington D.C. 

Los Angeles 

San Francisco 

Seattle 

10 

0 10 20 30 40 50 60 70 80 90 

The statistics for foreign investment in the US 

are based upon dollar volume and show a 

significant increase in investment volume for 

Middle Eastern and Pac Rim investors. Middle 

Eastern investment has been steadily growing 

over the past five years and has resulted in 

AFIRE organizing its first conference in Dubai 

in April. The Pac-Rim showing is an anomaly 

for 2006, reflecting a large transaction, and 

does not necessarily indicate a trend. 

Australian capital, while decreasing from the 

previous year’s level, continues to show significant 

strength as it has for the past four 

years. German capital showed a slight dip in 

2006 compared to previous years. 

Interestingly, some German investors have 

been net sellers, especially of offices, over 

the past year, while other Germans are net 

buyers. 

Foreign investors into the US are constantly 

changing. One year the most active 

About Afire 

ASSOCIATION OF FOREIGN INVESTORS IN REAL ESTATE 

41 

40 

Broadening Investment Strategies 

may be the Germans and the next year the 

Australians, or the Middle Eastern investors. 

AFIRE’s continuing challenge is the make 

certain our membership reflects the diversity 

of investors present at any one time in the US 

and global markets. 

Summary 

AFIRE members are adopting new strategies 

to invest capital and maximize returns. While 

spreading the wealth more widely, the US 

continues to be the safest and most secure 

country for their investments. However, in 

the race for capital appreciation, the US is 

being challenged by a growing number of 

real estate markets around the world. More 

traditional real estate investors can take 

comfort in the fact, however, that the favorite 

global cities for real estate investment are 

still London, New York City, Paris and 

Washington, DC, and not yet Shanghai, 

Mumbai, or Dubai. $ 

As the official voice of the foreign real estate industry in the United States and the preeminent 

global real estate organization, the Association of Foreign Investors in Real 

Estate (AFIRE) represents the interests of 180 investing organizations from 17 different 

countries. Founded in 1988, AFIRE operates much like a private “club” and provides an 

exclusive environment where principals and senior executives can meet and exchange 

information through regularly scheduled meetings in the US, Europe and key cities 

around the world. It provides exposure to influential US policy makers and opinion 

leaders, such as Alan Greenspan, Madeleine Albright and General Colin Powell, who 

spoke at recent Annual Membership Meetings. AFIRE also provides updates on important 

legislation and tax regulations, and informative publications dedicated to ensuring 

that the foreign investor is as informed as the domestic investor. AFIRE is governed solely 

by non-US investor institutions through their designated delegates and is managed by a 

full-time staff in Washington, DC. Membership is on a corporate basis and by invitation 

only. For more information, go to www.afire.org. 

74 

86 

features 

Score 


analyst view 

170 

160 

150 

140 

130 

120 

110 

European Property: Back to reality 

1 Not enough upside potential 

We believe the average upside to our price 

targets is not enough to make the sector a 

strong buy. We currently estimate only 3% 

upside potential to our current fair value and 

Figure 1: EPRA Europe total return (31-Dec-05 = 100) 

100 

31-12-05 28-02-06 30-04-06 30-06-06 31-08-06 31-10-06 31-12-06 28-02-07 

Source: Datastream 


By Harm Meijer, Tim Leckie, Osman Malik 

JP Morgan 

European real estate stocks generated a total return of 50% in 2006 and added another 6% 

until they hit their all-time high on 19 Feb 07. Since then European property stocks have 

retreated 8% to current levels (13 th March 2007). We think certain stocks, such as British Land, 

Liberty Int. and Land Securities, look attractive, but in general we believe the risk/return profile 

is not attractive enough to buy aggressively into the sector. We cite 5 reasons. 

Table 1: Bubble check list 

Event Yes / No Our view 

10% upside potential to our ‘stretched’ price 

targets, set on next year’s assigned value 

instead of the current year’s. In addition, 

stocks with the highest upsides to our PTs 

(Price Targets), such as UK large caps, have 

Valuation? Yes / No Stock prices are not in bubble, but incorporate a lot of positive news. 

We believed the market was priced to perfection on 19 Feb 2007 

Overvaluation compared to historical averages? Yes Eurozone property stocks trade at historically unattractive multiples 

Monetary expansion? Yes We believe that monetary expansion started the property boom 

Scandals? Yes Valuation issues with German open-ended funds 

Stock market bubble preceded jump in property prices? Yes Internet bubble 

Return expectations have changed? Yes Our IRR estimates have been lowered to 6-8% 

Price increases in excess of CPI for years? Yes Over the last 5 years the UK RPI index has risen by 17%, while the capital growth of 

UK commercial property was 50% 

5 year real property share price returns at all-time high? Yes All-time high since 1996 

Price increases boil over to other countries? Yes Property boom around the globe has led to yield compression everywhere 

High expectations? Yes Rental growth and capex seems to be ignored in certain cases 

Other parties joined the scene? Yes Leveraged players and institutions. Some new investors may have little experience in property 

Insiders negative? Yes CEOs have called the top of the market several times already and several board members have 

sold shares 

Speculative buyers? Yes We have seen speculative buyers in the listed property market over the last three months 

Direct market pricing irrational? No But if strong capital growth continues, could enter bubble zone 

Stock market pricing irrational? Yes Stock prices have overshot over the last three months, returning to ‘normal’ now 

Number of IPOs increasing? Yes Last year saw a boom in equity issuance in Europe of €16.75bn coming from €6.84bn the year 

before 

New view on the sector? Yes The general view is that the sector has re-rated (we share this, but believe it has moved too far) 

or that a new time has emerged where investment returns will be low forever 

Media interest? Yes Lots of articles, both positive and negative 

Source: JPMorgan estimates. 

the weakest market momentum, defined as 

the difference between next year’s assigned 

value and the current assigned value. Ideally, 

we would look for stocks with high upside 

and high momentum, as indicated by the 

circle in Figure.2. It is striking to see none of 

the stocks in our universe fit these criteria. 

2 Just returned from overshooting phase 

We believe we hit the ceiling on 19 Feb 07 

and estimated at that moment 2% downside 

to our ‘stretched’ price targets. In our view, 

that date marked the end of the overshooting 

phase, which indeed showed signs of a 

bubble. Going forward, we expect a transition 

to the next phase: lower market 

returns. 

Based on our bubble check list (see Table.1 

below), we believe that European property 

stocks showed strong signs of a bubble, in 

particular over the period December 2006 to 

19 February 2007. It’s hard to judge whether 

an investment is in bubble phase or not, in 

our view, but our colleagues in the JPMorgan 

Global Issues team wrote in their note Are 

alternatives the next bubble? (8 September

Price target momentum 

20% 

15% 

10% 

5% 

0% 

-5% 

Figure 2: Price target momentum vs upside to assigned value 

Corio 

Metrovacesa 

PEPR 

HIGH MOMENTUM AND HIGH UPSIDE 

Unibail Klepierre 

IGD Great Portland 

Fonciere des Regions Wereldhave 

Beni Stabili 

PSP Swiss 

Hammerson 

VastNed Retail 

Rodamco Europe 

Eurocommercial Properties 

Shaftesbury 

VastNed O/I 

Slough Estates Brixton 

IVG 

Liberty International 

British Land 

Land Securities 

Derwent London 

Big Yellow 

-10% 

-5% 0% 5% 10% 15% 20% 25% 

2006): “if it walks and talks like past bubbles, 

then it is probably one.” Although we still 

believe that valuations of property stocks are 

not unrealistic (but rather price in a lot of 

positive news), it’s striking to see that a lot 

of the questions in our bubble list are positively 

answered. 

3 Share price drivers losing strength 

This time last year we could easily identify 

several drivers for listed property that were 

not in share prices including positive results 

surprises, accelerating GDP growth, hidden 

value in development pipelines, introduction 

of REIT structures in the UK and Germany, 

accommodative interest rates and yield 

spreads, and corporate action. 

Now in 2007, we see most of these drivers as 

either factored in the share prices or no 

longer supportive. In particular we think UK 

REITs are priced in, and development pipelines 

and even future acquisitions are 

increasingly priced in. Rental growth in some 

markets looks to be reaching cyclical peaks 

(UK retail) while P/NAV ratios on the 

Continent look to factor in the more positive 

conditions in France and Spain, interest rates 

have moved up 70-100bps (short-term rates 

over last 12 months) and finally corporate 

activity and cash takeover bids in particular 

are unlikely at these prices, in our view. We 

think the main driver for property is currently 

GDP growth (and hence rental growth) with 

a stronger two-year outlook than a year ago 

according to our economics team. As a result, 

property pricing is more vulnerable than 

before to an economic slowdown. 

Upside to Assigned value t+1 

4 Small margin for error 

We believe that property valuations are based 

on a lot of positive news and that a small 

change in rental growth or interest rates could 

significantly impact property valuations. We 

estimate that our (like-for-like) capital growth 

European Property: Back to reality 

Table 2: Summary of European listed property drivers 

2007 

Driver Negative Neutral Positive Trend Our Comment 

Price target upgrades X 

Source: JPMorgan estimates; Datastream 

forecasts for both the Continent and UK look 

fair and leave little room for large upgrades, 

in particular if interest rates were to rise or 

rental growth to falter. As our DCF models for 

capital growth are based on low bond yields 

(also in the future) and in general above trend % 

q 

We are less likely to increase price targets 

than before, as we expect property markets to 

slow in the future 

Rental growth X Qp Strong growth for Continent and UK offices 

priced in 

Yield shift X q Interest rates 60-100 bps higher, slower yield 

compression 

Vacancy X &’ Company portfolios are well let but low rever- 

sionary potential 

Development pipelines X &’ Increasingly priced in according to our models 

Results X &’ No longer surprising on upside, season to 

date in line (exception of France) 

Future transactions X q Execution risk increasing as more companies 

seek to invest 

REITs X q Priced in 

Equity risk premium X q Appetite for risk can’t get much higher 

GDP X Q Higher growth expectations in Europe versus 

Interest rates X 

q 

last year 

Interest rates put pressure on EPS due to 

higher interest expenses and reduce room for 

capital growth 

Inflation X &’ Indexed leases give some protection 

Corporate activity X 

&’ 

Cash bids with a 15% premium on current 

prices do not create significant higher ROE 

than the required rate of return 

Capital flows X ↔&’ Pension funds increasing allocations, alterna- 

Source: JPMorgan estimates. 

tive investments, private equity 

analyst view 


analyst view 

St. Dev. 

DY Relative P/E 

DY Relative 

35 

30 

25 

20 

15 

10 

5 

2.2 

2.0 

1.8 

1.6 

1.4 

1.2 

1.0 

Figure 3: Daily standard deviation (annualized) EPRA UK, Eurozone and Europe vs MSCI Europe 

EPRA Europe 

EPRA Eurozone 

0 

27-02-97 27-02-98 27-02-99 27-02-00 27-02-01 27-02-02 27-02-03 27-02-04 27-02-05 27-02-06 27-02-07 

Figure 4: Real Estate dividend yield relative P/E 

Real Estate rel fwd P/E 

+2 std dev 

+1 std dev 

Figure 5: Real Estate dividend yield relative 


MSCI Europe 

EPRA UK 

Average 

-1 std dev 

-2 std dev 

0.8 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 

Year 


2.3 

2.1 

1.9 

1.7 

1,5 

1.3 

1.1 

0.9 

0.7 

By Harm Meijer, Tim Leekie, Osman Malik 

JP Morgan 

Real Estate trailing DY rel to mkt 

+1 std dev 

Average 

-1 std dev 

0.5 

1982 1987 1992 1997 2002 2007 

Year 



rental growth forecasts, we believe that the 

margin for error is small. In addition, we 

wonder whether the current ‘exit-rates’ take 

account of sensible future capex. 

Because a lot of good news is currently 

priced in, we believe that property stocks are 

more volatile to economic events. We currently 

estimate that the volatility of property 

stocks is at an all-time high at 20% for the 

UK and 14% for the Eurozone. Both are also 

higher than general equities measured by 

the MSCI Europe (13%). 

5 Property relatively expensive 

Property looks expensive compared to general 

equities, which is reflected in a relative alltime 

high PE and low dividend yield. In combination 

with the other four points, this makes 

the sector less attractive within equities and 

could lead to generalists leaving the sector. 

In summary, we are of the view that the sector 

is not a strong buy, as we generally believe 

that the risk/return profile of European real 

estate stocks is not attractive enough. If stocks 

were to fall by 10% in the coming period, then 

the sector becomes really interesting again. If 

they were to rise by 10%, we think it’s time to 

sell. Now, we’re in a twilight zone and we 

reiterate that investors should not buy aggressively 

into the sector. 

To receive a copy of the full research report 

please contact the JPMorgan property team. $ 

Disclaimer: 

These are the views of the authors and 

don’t necessarily reflect the views of EPRA.

Pros and cons of Russian investment 

Moscow, the largest city in Europe, has roughly only 10% of the office space stock of Paris, the 

second largest. In fact, Moscow (population 11 million), with around 5 million square meters 

of quality space, has less space than Zurich (population 1.3 million), though the population of 

Moscow is some 60% higher than that of Switzerland as a whole. St. Petersburg, the 2nd largest 

city in Russia, with a population of 5 million, has roughly 500 thousand meters of quality 

space, almost all of it due to renovation of existing structures. 

Terry Olin 

Management Committee 

Eastern Property Holdings 

Terry Olin is a graduate of North Dakota State 

University with a degree in Business Administration 

and Economics. He began his career with EF 

Hutton in the mid-1980s, and joined Merrill Lynch 

in 1991. In 1993 he moved to Moscow, Russia and 

joined Troika Dialog, a Russian investment bank. In 

2001, he left Moscow to join Brunswick Emerging 

Markets in Stockholm, Sweden as Partner with 

responsibility for emerging Europe. In 2002 he 

moved to Geneva, Switzerland to join MCT, now 

renamed Valartis Group, where he participated in 

the creation of Eastern Property Holdings, and is 

today the Management Committee member directly 

responsible for corporate operations and finance. 

He now divides his time between Switzerland and 

Russia. Terry Olin was born in the state of Illinois in 

1962; he is married and has two children. 

Late afternoon in Moscow. 

Keeping up with world standards for 

commercial space was not a priority for 

Soviet planners, so, understandably, Russia 

emerged from the Soviet era in 1991 with 

virtually no modern office, retail, or logistics 

space. The first years of the post-Soviet 

era saw little domestic investment. Russian 

businessmen in the uncertain environment 

of the early 90’s were more likely to send 

their capital safely abroad than reinvest at 

home, and those developers who did take 

on projects were hit by the spiking vacancies, 

collapsing rents, and triple digit interest 

rates of Russia’s 1998 financial crisis. It took 

six years, until 2003, for new construction to 

recover to 1997 levels. 

Today Moscow displays all the characteristics 

of a supply and demand imbalance. The 

vacancy rate for Class A office space is practically 

zero percent, and prime rents are 

among the worlds highest; surpassed globally 

by only London and Tokyo. Quality retail 

space is in similar demand, with city center 

locations being pre-leased as much as two 

years before completion. Take up in Moscow 

surpassed London and was second only to 

By Terry Olin 

Management Committee Eastern Property Holdings 

market focus 

Paris in 2005, and seems to have surpassed 

Paris in 2006. 

Rental yields for prime Moscow properties 

are no longer in the 12-13% range of two or 

three years ago, but remain in high single 

digits - twice what is achievable in Western 

Europe, and 50-60% above the market in 

Central Europe. 

More development and more investors 

would set all the imbalances in the previous 

paragraphs right – and in time they surely 

will – but why hasn’t it all happened more 

quickly? 

For the most part, development in Russia 

has remained a local game. The bureaucracy 

is unwieldy enough for local developers, but 

has proven completely frustrating for most 

foreign operators. Securing over 200 permits 

and permissions necessary to construct a 

commercial property would be daunting in a 

rational, well organized system, staffed by 

efficient, altruistic professionals. Shaking 

these permits out of a remarkably convoluted 

bureaucracy manned by Soviet style functionaries 

is a truly Herculean undertaking. 

If this was not enough, few acquisitions and 

even fewer projects come with a completely 

clean legal bill of health. Russia’s legal 

system is increasingly rational and in many 

areas very well thought out, but contradictory 

laws and those subject to multiple inter- 

www.epra.com - april 2007 - epra news 21 

%

market focus 

pretations still exist. As a result, a thorough 

due diligence process will almost invariably 

uncover one or two imperfections, often in 

the privatization process, which will have to 

be accepted, or there is no deal. 

Good projects, in any case, are hard to come 

by for the new entrant. Not only are local 

developers with established relationships on 

a local or federal level actively pursuing 

prime sites, but someplace within the corporate 

structure of each cash-rich Russian 

resource company or financial-industrial 

group there is a real estate operation. This is 

tough competition if you are from “out of 

town.” 

Last year Western property investors arrived 

in force. Investment buying in 2006 exceeded 

the sum total for the prior decade. Still, there 

are now hundreds of millions of additional 

dollars, raised to invest in Russia properties, 

which have yet to be employed, and behind 

that money a few billion dollars more of 

announced intentions. 

Foreign investment capital earmarked for 

Russia is at least matched by local liquidity: 

Russian end-users are willing to buy trophy 

properties employing different economic 

parameters and less stringent due diligence 

compared against Western investors, resource 

companies are looking for opportunities to 

employ excess capital, and property funds 

for local investors have appeared. As a result, 

choice properties tend to change hands 

within the local network, with very few properties 

ever actually appearing on the open 

market. 

Russia’s property market is a good case study 

for the relationship between risk and reward. 

There have been brilliant returns for those 

who have accepted the not-insignificant risks 

and taken on the challenges. Early in this 

decade yields were in the high teens, but 

there was no Land Code guaranteeing property 

rights, and no financing. Today Russia is 

seen as investible by the more adventurous 

institutional property investors, but yields are 

in the single digits, and still come with risks 

not found in more developed markets. $ 


Pros and cons of Russian investment 

Moscow State University. 

About Eastern Property Holdings (EPH) 

Eastern Property Holdings (EPH) is a Russia-focused property company established in 

2003 and listed on the Zurich stock exchange. The company’s $320 million of net assets 

is divided between existing properties, owned directly or through joint ventures, and 

investment projects. The company is managed by a combination of Western and Russian 

professionals based in Moscow, St. Petersburg and Geneva.

Alex Moss 

Chairman 

AME Capital specialises in the real estate sector 

and provides corporate finance and research advisory 

services to corporate and institutional clients. 

AME Capital is authorised and regulated by the 

Financial Services Authority. 

The company was founded by Alex Moss in 2002. 

He gained an MA in the Economics of Finance and 

Investment from Exeter University in 1981, and has 

spent 25 years in investment banking, specialising 

in the property sector. 

After spells with Panmure Gordon and Hoare 

Govett he joined BZW (which later became part of 

CSFB) in 1988, where he was one of the Extel rated 

property research team. Moving to the Equity 

Capital Markets department he was responsible for 

fund raising and corporate advisory services to 

quoted property companies, and executed a wide 

range of transactions for a number of companies 

including Burford, Capital and Regional, 

Chelsfield, Eurocommerical Properties NV, 

Grantchester, and Hammerson. He later became 

Head of Property in the Investment Banking 

Division, responsible for equity and debt issuance 

in the UK and Europe. 

Alex moved to Apax Partners &Co Capital in 1998, 

to specialise in private equity transactions in the 

property sector, where clients included GE Capital, 

before forming AME Capital in May 2002. 

AME Capital has acted for a variety of clients 

including private and quoted companies, institutional 

investors,and limited partnerships. 

AME Capital has constructed a database of all 

quoted property companies globally, currently over 

2000 companies in over 60 countries, and of specialist 

property securities funds with a European 

and global mandate. It has also constructed a 

series of global REIT indices, and specialist sector 

indices. 

A full list of AME Capital’s research and index products 

can be found on the company website: 

’ www.amecapital.co.uk 

Fund strategies 

Figure 2 shows that of all funds analysed, 

61% (US$ 31 billion) of the assets under 

management focus on the broad selection of 

global real estate securities. 31% (US$ 16 

billion) invest in global REITs only. Global ex 

US comprises 5% of the total, offering investors 

with an existing US exposure to bolt on 

a strategy that ultimately results in a full 

global coverage. The same is true at Global 

ex North American level. The heavy influence 

of the Australian investors is evident in the 

Global ex Australia mandate - the demand 

for a Global diversified portfolio driving 

Australian investors cross border. 

Fund Domicile & Currency 

The United States makes up 39% (US$ 20 

billion) of the domicile of the assets under 

management (figure.3). United States funds 

are offered in either open or closed end 

fund structures. Figure.4 shows that 43% of 

the assets under management are in US$. 

Figure 2: Global Mutual Funds Stategy - AUM 

Global ex North America 2% 

Global ex US 5% 

Global REIT 31% 

Global 

ex Australia 1% 

Global 61% 

By Fraser Hughes EPRA & Alex Moss AME Capital 

Global Mutual Funds Explode 

Figure 3: Global Mutual Funds Domicle 

Breakdown - AUM 

Belgium 1% 

Ireland 1% 

Canada 2% 

Netherlands 

5% 

Australia 

6% 

Luxembourg 10% 

Japan 31% 

Source: EPRA, AME Capital, Bloomberg Source: EPRA, AME Capital, Bloomberg 

US 39% 

market focus 

The appetite for global real estate is not a new phenomenon. Let’s face it; the first global fund 

was introduced in 1989 1 . However, the real growth in the number and size of global funds has 

occurred in the last three years. We published an overview of the global mutual fund market 

at the beginning of 2006. At that point in time we covered 68 funds with total assets under 

management of US$ 14.5 billion. That figure has jumped to US$ 52 billion made up of 153 funds! 

Taking into account funds that we may have omitted in 2006, it is safe to say that the market 

has exploded over this period, both in terms of number of funds and size 2 . Figure 1 details the 

153 global funds analyzed. Bloomberg ticker codes are provided for each of the funds in the 

list. Further information on performance, manager fees, etc, can be obtained directly from AME 

Capital. This list is not exhaustive, and we encourage comments and suggestions in order to 

extend and improve on this version. 

The % difference coming mainly from 

Luxembourg domiciled funds quoted in 

US$. Japan weighs in at 31% (US$ 16 billion) 

both in terms of domicile and currency, as 

you would expect. Japanese fund managers 

employing the ‘fund of funds’ structure. 

Japanese investors have tremendous appetite 

for the Global “REIT only” product. Of 

the 24 Global REIT funds all but six are ran 

outside of Japan. Luxembourg (US$ 5 billion) 

provides a home for ten percent of the 

global mutual funds, and packaged under 

either the SICAV or FCP structure. Listed real 

estate investment has always seen support 

from Australia and the Netherlands, these 

countries weighing in at six percent and five 

percent respectively in terms of domicile. 

Canada gets two percent of the share, with 

Ireland and Belgium taking up one percent. 

Looking at currency, the Euro makes up 14% 

- with the Netherlands and Luxembourg the 

largest contributors. % 

Others 5% 


market focus 


Table 1 AUM Fund Fund Fund 

TICKER CODE FUND NAME FUND MANAGEMENT CO US$m Type Currency Mandate Domicile 

FRESX US Equity FIDELITY REAL ESTATE INVEST Fidelity Management & Research 9.198 Open-End Fund USD Global US 

01312052 jp Equity NOMURA GLOBAL REIT OPEN Nomura Asset Management Co Ltd 5.999 Fund of Funds JPY Global REIT JP 

47311044 JP Equity DLIBJ DIAM WORLD REIT INCM DLIBJ Asset Management Co Ltd/ 3.785 Fund of Funds JPY Global REIT JP 

IGR US Equity ING CLARION GL R/E INCOME FD ING Clarion Global Real Estate 2.119 Closed-End Fund USD Global US 

AMPWGPS AU Equity AMP WHL-GLOBAL PROP SEC AMP Capital Investors Ltd 1.949 Unit Trust AUD Global AU 

AAPFGL Na Equity ABN AMRO GLOBAL PROP SEC FD ABN AMRO Investment Management 1.686 Open-End Fund EUR Global NL 

11311047 JP Equity KOKUSAI WORLD REIT OPEN MDVD Kokusai Asset Management Co Lt 1.529 Fund of Funds JPY Global REIT JP 

DJERESE LX Equity DJE REAL ESTATE-P DJE Investment SA 1.428 FCP EUR Global LU 

IRFAX US Equity COHEN & STEERS INTERN RLTY-A Cohen & Steers Capital Managem 1.400 Open-End Fund USD Global ex US US 

02311041 JP Equity NIKKO AMP GLBL REIT FD MD A Nikko Asset Management Co Ltd/ 1.384 Fund of Funds JPY Global REIT JP 

WIPGREA LX Equity WWIDE INV PORT-GLOB RE ES-A$ Prudential Investments LLC 1.229 SICAV USD Global LU 

79311041 JP Equity SUMITOMO M GLOBAL REIT OPEN Sumitomo Mitsui Asset Manageme 1.227 Fund of Funds JPY Global REIT JP 

MSUAX US Equity MORGAN STANLEY INS INTN RE-A Morgan Stanley Investment Mana 1.216 Open-End Fund USD Global ex North America US 

FIREX US Equity FIDELITY INTL REAL ESTATE Fidelity Management & Research 1.205 Open-End Fund USD Global US 

EGLRX US Equity ALPINE INTL REAL ESTATE EQ-Y Alpine Management & Research L 1.105 Open-End Fund USD Global ex US US 

IGLAX US Equity ING GLOBAL REAL ESTATE FD-A ING Investments LLC 983 Open-End Fund USD Global US 

OPTSREI CN Equity UNITED REAL EST INV POOL-W United Financial Corp 768 Open-End Fund CAD Global CA 

04312056 JP Equity DAIWA GLOBAL REIT OPEN Daiwa Asset Management Co Ltd/ 609 Fund of Funds JPY Global REIT JP 

AAHIP NA Equity ABN AMRO HIGH INCOME PROPERT ABN AMRO Investment Management 600 Open-End Fund EUR Global NL 

AGREX US Equity AIM GLOBAL REAL ESTATE FD-A AIM Advisors Inc 577 Open-End Fund USD Global US 

RRGAX US Equity DWS RREEF GLB REAL EST SEC-A RREEF 480 Open-End Fund USD Global US 

RWF US Equity COHEN & STEERS WORLDW REA IN Cohen & Steers Capital Advisor 468 Closed-End Fund USD Global US 

KPR9023 BB Equity KBC PRIVILEGED PORT REAL -C KBC Bank SA 435 SICAV EUR Global BE 

NGREX US Equity NORTHERN GLOBAL RE INDEX FD Northern Trust Investments NA 415 Open-End Fund USD Global US 

02313043 JP Equity NIKKO LASALLE GLOBAL REIT FD Nikko Asset Management Co Ltd/ 401 Fund of Funds JPY Global REIT JP 

09311051 JP Equity NIPPON GLOBAL REIT SELECT Japan Investment Trust Managem 384 Fund of Funds JPY Global REIT JP 

SEBREEG GR Equity SEB REAL ESTATE EQUITY GLOBL SEB Invest GmbH/Germany 381 Open-End Fund EUR Global DE 

FIGLOPA LX Equity FIDELITY FDS-GLOBAL PROP-AGBPD Fidelity International 375 SICAV GBP Global LU 

EIIPX US Equity EII INTERNATIONAL PROPERTY-I EII Realty Securities Inc 364 Open-End Fund USD Global US 

GLBPROI ID Equity GLOBAL PROPERTY FUND European Investors Inc/New Yor 362 Open-End Fund EUR Global IE 

PCAREIA TT Equity PCA GLOBAL REIT FUND-A PCA Securities Investment Trus 314 Unit Trust TWD Global REIT TW 

DEUGEAP AU Equity DEUTSCHE-RREEF GL EX-AU PROP Deutsche Asset Management Ltd/ 306 Unit Trust AUD Global ex Australia AU 

HHGPEA1 LX Equity HENDERSON HOR-G PROP EQTY-A1 Henderson Global Investors Ltd 281 Open-End Fund USD Global LU 

SARREEA LX Equity SARASIN REAL ESTATE EQ EUR-A Bank Sarasin & Co Ltd 264 SICAV EUR Global LU 

SARPRYA GU Equity SARASIN CI GLB PRPTY FND-A Sarasin Funds Management Ltd/G 251 Open-End Fund GBP Global GG 

MRLAX US Equity MORGAN STANLEY INS GLBL RE-A Morgan Stanley Investment Mana 239 Open-End Fund USD Global US 

RGCGPED LX Equity ROBECO PROPERTY EQUITIES-=D Robeco Investor Services Bv 226 SICAV EUR Global LU 

PERGPST AU Equity PERENNIAL-GLB PROPERTY SEC Perennial Investment Partners 219 Unit Trust AUD Global AU 

OHOG NA Equity OHRA ONROEREND GOED FONDS Ohra 204 Open-End Fund EUR Global NL 

INGRESA ID Equity INVESCO GLB REAL EST SEC-A I Invesco Asset Management Irela 198 Open-End Fund USD Global IE 

KBS2677 BB Equity KBC SELECT IMMO WORLD PLUS KBC Bank SA 195 SICAV EUR Global BE 

IAMIMSC SW Equity IAM IMMO SECURITIES FUND Julius Baer Investment Funds S 194 Open-End Fund CHF Global CH 

SCHGPSA LX Equity SCHRODER INTL GL PR SC-A AC Schroder Investment Management 182 SICAV USD Global LU 

SCHGPEA LX Equity SCHRODER INTL GL PR SC-A =AC Schroder Investment Management 182 SICAV EUR Global LU 

DBGLRES LX Equity DB RREEF GL REAL ESTATE SEC DWS Investment SA 170 FCP EUR Global LU 

MUWRECCL CN Equity MACKENZIE UN WLD REAL ES C-A Mackenzie Financial Corp 165 Open-End Fund CAD Global CA 

FOCGLRE LX Equity F&C PORT FD-GLOB REAL EST SC F&C Management Ltd/United King 163 SICAV EUR Global LU 

UCIFGRA SW Equity UBS CH INST-GL RL EST SEC-A UBS Fund Management AG 158 Open-End Fund CHF Global CH 

DEUGLPS AU Equity DEUTSCHE-RREEF GLB PROP SEC RREEF 154 Unit Trust AUD Global AU 

79311046 JP Equity SUMITOMO M GLBL REIT 3M DVD Sumitomo Mitsui Asset Manageme 136 Fund of Funds JPY Global REIT JP 

POSTVRE NA Equity POSTBANK VASTGOED FONDS Not Disclosed 132 Open-End Fund EUR Global NL 

24 epra news - april 2007 - www.epra.com



DBSGLPR SP Equity DBS GLOBAL PRPTY SECS - S$ DBS Asset Management Ltd/Singa 127 Unit Trust SGD Global SG 

VANIPSH AU Equity VANGUARD INTL PROP SEC IDX H Vanguard Investments Ltd/Austr 125 Unit Trust AUD Global AU 

04313066 JP Equity DAIWA RESONA WRD REIT FUND Daiwa Asset Management Co Ltd/ 124 Fund of Funds JPY Global REIT JP 

02314054 JP Equity NIKKO GLOBAL REIT PORTFOLIO Nikko Asset Management Co Ltd/ 117 Fund of Funds JPY Global REIT JP 

FUBREIT TT Equity FUBON GLOBAL REIT FUND Fubon Securities Investment Tr 111 Unit Trust TWD Global REIT TW 

OASPROP SJ Equity OASIS PROPERTY EQUITY FUND Crescent Capital Ltd 107 Unit Trust ZAr Global ZA 

BGGINMG SM Equity BG GESTION INMOBILIARIA G Guipuzcoano Inversiones SGIIC 103 Fund of Funds EUR Global ES 

INVGLAA HK Equity INVESCO GLOBAL LM INCOME A-A INVESCO Asia Ltd/Hong Kong 101 Unit Trust USD Global HK 

INVAGLI HK Equity INVESCO GLOBAL LM INCOME C-A INVESCO Asia Ltd/Hong Kong 101 Unit Trust USD Global HK 

SEBYEIN NO Equity SEB BYGG EIENDOM SE SEB Kapitalforvaltning/Oslo 96 Open-End Fund NOK Global NO 

NMRE NA Equity ING ONROEREND GOED AANDELEN Not Disclosed 93 Open-End Fund EUR Global NL 

LIOTRIM FP Equity DYNALION IMMOBILIER Credit Agricole Asset Manageme 91 FCP EUR Global FR 

INGGLRE MK Equity ING GLOBAL REAL ESTATE FUND ING Funds Bhd 80 Open-End Fund MYR Global MY 

HENPRPE SP Equity HENDERSON GLOBAL PROPERTY EQ Henderson Global Investors Sin 75 Unit Trust SGD Global SG 

HGLOPRO MK Equity HWANG-DBS GLOBAL PROPERTY FD Hwang-DBS Investment Managemen 73 Unit Trust MYR Global MY 

79311067 JP Equity S MITSUI GL REAL ESTATE F-BM Sumitomo Mitsui Asset Manageme 72 Fund of Funds JPY Global JP 

0431905B JP Equity DAIWA GLOBAL REIT FUND - SMA Daiwa Asset Management Co Ltd/ 70 Fund of Funds JPY Global REIT JP 

AVGLRP1 LX Equity AVIVA MOR-GLOBAL REIT-B= Aviva Holdings Luxembourg SA 68 SICAV EUR Global LU 

UBSIESW SW Equity UBS INV FNDTN FOREIGN REAL E UBS Fund Management AG 68 SICAV CHF Global CH 

HSBCPSO LX Equity PROPERTY STOCKS OPPORTUNITY HSBC Trinkaus Investment Manag 63 FCP EUR Global LU 

VAMPROP IO Equity VAM-PROPERTY VAM Ltd 62 Open-End Fund GBP Global IM 

ABNHIGP AU Equity ABN AMRO-HIGH INC GLB PROP S ABN AMRO Asset Management Ltd/ 59 Unit Trust AUD Global AU 

FGREUAD LX Equity FRANK TEMP GL RE EST $-A DIS Franklin Templeton Investment 58 SICAV USD Global LU 

PRIFPRA LX Equity LCF ROTH PRIFUND-PROPERTY-A= Banque Privee Edmond de Rothsc 55 SICAV EUR Global LU 

GLPROPA AV Equity CONSTANTIA GLOBAL PROPERTY-A CPB KAGmbH/Austria 53 Fund of Funds EUR Global AT 

INVGLPS AU Equity INVESCO WHL-GL PROPERTY SEC INVESCO Asset Management Ltd/A 48 Unit Trust AUD Global AU 

RRGSICU LX Equity RREEF GLB REAL ESTATE-IC$ DWS Investment SA 46 SICAV USD Global LU 

RRGIICU LX Equity RREEF GLB REAL EST INC-IC$ DWS Investment SA 46 SICAV USD Global LU 

INGGRPC LX Equity ING (L) INV GLOB REAL ES-PC= ING Investment Management/Luxe 45 SICAV EUR Global LU 

MSGRESA ID Equity MSMM-GLBL REAL ESTATE S-A Frank Russell Investments Ltd/ 45 Open-End Fund USD Global IE 

CFICGPS AU Equity CFST FCI-COLLIERS INTL PROP Colonial First State Investmen 43 Unit Trust AUD Global AU 

AGFGREEQ CN Equity AGF GL REAL ESTATE EQ CL-MF AGF Funds Inc 41 Open-End Fund CAD Global CA 

FSIGPRI SP Equity FIRST STATE GLOBAL PTY - S$ First State Investments/Singap 41 Unit Trust SGD Global SG 

BTGPROP AU Equity BT WHL GLOBAL PROPERTY SECUR BT Funds Management Ltd/Austra 40 Unit Trust AUD Global ex Australia AU 

UBSGLPS AU Equity UBS INV FUND-GLB PROPERY SEC UBS Global Asset Management Lt 39 Unit Trust AUD Global AU 

IXGRUIC LX Equity IXIS AEW GLB RL ESTATE-IC$ IXIS Asset Management/France 38 SICAV USD Global LU 

JPMGPIF KY Equity JPM GLOBAL PROPERTY INCOME JF Funds Ltd/Hong Kong 38 Open-End Fund USD Global KY 

IMMOPLP AV Equity IMMO PLUS PORTFOLIO Privatconsult Vermoegensverwal 37 Open-End Fund EUR Global AT 

CPIGDAC LX Equity CITI PROP INV-GL DVRS-A$-ACC Citigroup 37 SICAV USD Global LU 

CPIGDIE LX Equity CITI PROP INV-GL DVRS-I=-ACC Citigroup 37 SICAV EUR Global LU 

EURREQ IM Equity EUROMOBILIARE REAL ESTATE EQ Euromobiliare Asset Mngmt SGR 33 Open-End Fund EUR Global IT 

GREE NA Equity INSINGER REAL ESTATE EQUITY Insinger de Beaufort Asset Man 32 Open-End Fund EUR Global NL 

FIDGLPS AU Equity FIDELITY GLOBAL PROPERTY SEC Fidelity International Ltd 31 Unit Trust AUD Global ex Australia AU 

EIG AU Equity EUROPEAN INV GLB PROPERTY TR European Investors Inc 29 Closed-End Fund AUD Global ex Australia AU 

UBSREBA LX Equity UBS LUX-GBL REAL EST SECU-BA UBS Global Asset Management/Zu 28 SICAV USD Global LU 

RBHOG NA Equity ROBECO HOOG DVD ONROEREND GO Robeco Investor Services Bv 28 Open-End Fund EUR Global NL 

ENGPPTU ID Equity ENOVARA-GL PRO 80% PROT-USD Enovara 27 Open-End Fund USD Global IE 

02311045 JP Equity NIKKO WORLD REIT FUND Nikko Asset Management Co Ltd/ 24 Fund of Funds JPY Global REIT JP 

UOBUGRS SP Equity UOB UNITED GLB REAL EST SECS UOB Asset Management Ltd/Singa 23 Unit Trust SGD Global SG 

JPMGESA LX Equity JPMORGAN F-GL RE ES SE-A=-A JPMorgan Asset Management Euro 23 SICAV EUR Global LU 

CFPCGPS AU Equity CFST FCP-COLLIERS INTL PROP Colonial First State Investmen 22 Open-End Fund AUD Global AU 

market focus 


www.epra.com - april 2007 - epra news 25 

%

market focus 




LGSTINP FP Equity STRATEGIE INDICE PIERRE Legal & General Asset Manageme 18 FCP EUR Global FR 

ICRAX US Equity TA IDEX CLA R/ESTATE SEC-A AEGON/Transamerica Fund Advise 17 Open-End Fund USD Global US 

DAVDREA LX Equity DAVIS SICAV-DAVIS REAL EST-A Davis Selected Advisors LP/Tuc 16 SICAV USD Global LU 

VANIPSI AU Equity VANGUARD INTL PROP SEC IDX Vanguard Investments Ltd/Austr 14 Unit Trust AUD Global AU 

BBVAIMB PL Equity BBVA IMOBILIARIO - FEI BBVA GEST SGFIM SA/Portugal 13 Open-End Fund EUR Global PT 

02311047 JP Equity NIKKO AMP GLOBAL REIT FUN 6M Nikko Asset Management Co Ltd/ 13 Fund of Funds JPY Global REIT JP 

MSIIREA ID Equity MARRIOTT-INTL REAL ESTATE Singer & Friedlander Investmen 13 Open-End Fund USD Global IE 

FOYGPRO BH Equity FORSYTH GLOBAL PROPERTY-$ Forsyth Partners Ltd 13 Hedge Funds USD Global BM 

CEBGPAE MV Equity CELSIUS-BAR GLB PROP EUR-A Barclays Investment Services 12 SICAV EUR Global MT 

CEBGPUA MV Equity CELSIUS-BAR GLB PROP USA-A Barclays Investment Services 12 SICAV USD Global MT 

02311046 JP Equity NIKKO ING GLOBAL INCM REIT Nikko Asset Management Co Ltd/ 11 Fund of Funds JPY Global REIT JP 

CRESGPA ID Equity CRESENT-GLB PROPERTY EQUITY Crescent Capital Pty Ltd 11 OEIC USD Global IE 

GPFEMRG LE Equity GLOBAL PROPERTY EMERGING MKT Swiss Finance & Property Corp 11 Fund of Funds CHF Global LI 

01319059 JP Equity NOMURA WORLD REIT FUND A SMA Nomura Asset Management Co Ltd 9 Fund of Funds JPY Global REIT JP 

IMOVEST PL Equity IMOVEST Santander Imovest - SGFII SA/P 9 Open-End Fund EUR Global PT 

AMPCSFD AU Equity AMP FLS&CS-FD PROPERTY AMP Capital Investors Ltd 9 Fund of Funds AUD Global AU 

02313063 JP Equity NIKKO AMP GLBL REIT FD MD B Nikko Asset Management Co Ltd/ 8 Fund of Funds JPY Global REIT JP 

CSGLLPR AU Equity COHEN&STEERS GL LISTED PROP Cohen & Steers Capital Managem 8 Unit Trust AUD Global AU 

MGLREST SM Equity MADRID GLOBAL REAL ESTATE Gesmadrid SA SGIIC/Spain 8 Fund of Funds EUR Global ES 

CSGEALP AU Equity COHEN&STEERS GL EX AU L PROP Cohen & Steers Capital Managem 7 Unit Trust AUD Global ex Australia AU 

79311064 JP Equity SUMITOMO M GLOBAL REIT OP YD Sumitomo Mitsui Asset Manageme 6 Fund of Funds JPY Global REIT JP 

BTEBGLP AU Equity BT LS EMP-BT GLOBAL PROPERTY BT Funds Management Ltd/Austra 4 Open-End Fund AUD Global ex Australia AU 

JIRAX US Equity JPMORGAN INTERNATIONAL RE-A JP Morgan Investment Managemen 4 Open-End Fund USD Global US 

TRENDIE LX Equity TRENDCONCEPT IMMO EQUITY-B TrendConcept Fund SA/Luxembour 3 FCP EUR Global LU 

MACGPFU AU Equity MACQUARIE GLB PROP-UNHEDGED Macquarie Investment Managemen 3 Unit Trust AUD Global AU 

MARGRES SJ Equity MARRIOTT GLOBAL REAL ESTATE Singer & Friedlander Investmen 2 Unit Trust ZAr Global ZA 

AEGVAIN NA Equity AEGON WERELDWIJD VASTGOED FN Aegon 2 Open-End Fund EUR Global NL 

CELGREI FH Equity CELERES GLOBAL REIT FUND Celeres Fund Management/Finlan 1 Open-End Fund EUR Global FI 

GGREITX MP Equity GINSGLOBAL REAL ESTATE INDX= GinsGlobal Investment Manageme 1 Open-End Fund EUR Global MU 

MACGPFH AU Equity MACQUARIE GLB PROP-HEDGED Macquarie Investment Managemen 1 Unit Trust AUD Global AU 

04313058 JP Equity DC DAIWA GLOBAL REIT IDX FND Daiwa Asset Management Co Ltd/ 0 Fund of Funds JPY Global REIT JP 

HIGREIT GR Equity HI GLOBAL REIT HANSAINVEST GmbH -NA- FCP EUR Global REIT DE 

CWICGPS AU Equity CFST FCWI-COLLIERS INTL PROP Colonial First State Investmen -NA- Unit Trust AUD Global AU 

CSGLREI LX Equity COHEN & STEERS-GLOBAL R/E-I Houlihan Rovers SA -NA- SICAV USD Global LU 

CSREFIN SW Equity CS REAL ESTATE FUND INTL CS -NA- Open-End Fund CHF Global CH 

FIMREST FH Equity FIM REAL ESTATE FUND FIM Fund Management Ltd/Finlan -NA- Open-End Fund EUR Global FI 

HGPC LN Equity HENDERSON GLOBAL PROPERTY CO Henderson Global Investors Ltd -NA- Investment Trust GBp Global GG 

IGRE LN Equity ING GLOBAL REAL ESTATE SECS ING Real Estate Investment -NA- Closed-End Fund GBp Global GB 

JPGPSAI LN Equity JP MORGAN GL PRPTY SEC A-INC JP Morgan Investment Managemen -NA- Investment Trust GBp Global GB 

JPGREXA LX Equity JPMORGAN F-GLOBAL RE ES-X$-A JPMorgan Asset Management Euro -NA- UCIT USD Global LU 

JMGLPRO AV Equity MEINL GLOBAL PROPERTY FUND Julius Meinl Investment GmbH/A -NA- Open-End Fund EUR Global AT 

SCHGPSI LN Equity SCHRODER GLB PRPTY SEC-INC Schroder Unit Trusts Ltd/Unite -NA- Unit Trust GBp Global GB 

SKASGPS LN Equity SKANDIA GBL PPRT SECS Skandia Investment Management -NA- OEIC GBp Global GB 

SLPRORI LN Equity STANDARD LIFE SELECT PTY-R-I Standard Life Investments Ltd -NA- Unit Trust GBp Global GB 

-NA- GLOBAL REIT FUND Standard Life Investments Ltd -NA- OEIC GBp Global REIT GB 

-NA- GLOBAL REIT FUND Standard Life Investments Ltd -NA- SICAV EUR Global REIT LU 

STINPRA SJ Equity STANLIB INTL PROPERTY FUND A STANLIB Wealth Management Ltd -NA- Unit Trust ZAr Global ZA 

MMGREAA LN Equity SWIP MM-GBL REAL EST A-ACC Scottish Widows Investment Man -NA- OEIC GBp Global GB 

REITINV GR Equity UNIREITS-REIT-INVEST Union Investment Privatfonds G -NA- Open-End Fund EUR Global REITs DE 

STREFRE KY Equity STRATEGIC EQUITY-REAL ESTATE Lyxor Asset Management/France -NA- Unit Trust USD Global KY 


Total 51.721

Who’s the Biggest? 

Fidelity manages the largest fund by far. 

Fidelity’s global fund has assets under management 

of just over US$ 9 billion. It is worth 

noting that although the Fidelity fund has a 

global mandate, the vast majority of the existing 

assets are US based securities. Japan stacks 

up in second and third position, with Noruma’s 

Figure 4: Global Mutual Funds Currency 

Breakdown - AUM 

CAD 2% 

EUR 14% 

AUD 

6% 

GBP 1% 

JPY 31% 

Source: EPRA, AME Capital, Bloomberg 

USD 43% 

Others 3% 

Global REIT fund weighing in at US$ 6 billion 

and DLIBJ’ s World REIT fund at US$ 3.8 billion. 

ING Clarion which headed up the analysis 

back in January 2006 drops back to fourth spot 

with US$ 2.1 billion. The top five funds comprise 

41% of the total assets under management, 

with the top ten making up 60%. There 

are eleven funds with assets under management 

in the US$1 – 2 billion range. In the range 

US$ 500 – 999 million, there are only five 

funds. 61 funds with assets above the US$ 100 

million mark, meaning 92 funds have assets 

below this threshold. The average fund size is 

US$ 388 million, with the median point being 

significantly lower at US$ 73 billion. 

Summary 

In the last two years, the growth in the number 

of property securities mutual funds has been 

phenomenal. Total assets under management 

has grown from under US$10 billion in 2005, 

to almost US$52 billion in March 2007. Growth 

in both number and size of the global funds is 

driven by a number of reasons. However, the 

most publicised driver is the diversification 


market focus 

benefits offered by a global real estate portfolio. 

Real estate is a strong diversifier within 

the mixed-asset portfolio generally and a 

global real estate investment programme 

provides attractive diversification characteristics 

within the real estate allocation. For 

example, from a US standpoint, the addition 

of Europe and Asia to the investment universe 

more than doubles the size of your investment 

pool. In market capitalisation terms, the 

investment pool increases from US$410 billion 

to US$950 billion 3 . In addition, REIT developments 

and IPOs in Europe and Asia, continue 

to present investors a new level of opportunities. 

With this in mind, the size of the institutional 

quality Global listed real estate market 

could easily hit US$1.5 trillion within the next 

five years. $ 

1 The Alpine International Real Estate Equity Fund 

was introduced in February 1989. 

2 It is important to note, that the list does not 

include total assets under management of each of 

the asset managers. 

3 Using the regional free float market capitalizations 

of the FTSE EPRA/NAREIT Global Real Estate Index. 

Europe Funds Update AUM Fund Fund Fund 


AXAAEDC FP Equity AXA AEDIFICANDI-C AXA Investment Managers Paris/ 1.868 SICAV EUR Europe FR 

TRY LN Equity TR PROPERTY INVESTMENT TRUST Thames River Capital UK Ltd 1.686 Investment Trust GBp Europe GB 

MOREPII LX Equity MORGAN ST SICAV EURO PROP-A= Morgan Stanley Investment Mana 1.467 SICAV EUR Europe LU 

FORRECC LX Equity FORTIS L FUND-RE EST EURO-CC Fortis Investment Management L 1.396 SICAV EUR Europe LU 

HENEPSI LX Equity HENDERSON HORIZ-PAN EU PR-A2 Henderson Global Investors Ltd 1.320 SICAV EUR Europe LU 

MSUAX US Equity MORGAN STANLEY INS INTN RE-A Morgan Stanley Investment Mana 1.216 Open-End Fund USD International US 

INDFONC FP Equity CA-AM ACTIONS FONCIER Credit Agricole Asset Manageme 1.176 FCP EUR 75% EuroZone FR 

EEE FP Equity EasyETF EPRA EUROZONE AXA Investment Managers Paris/ 829 ETF EUR EuroZone LU 

SOGESIM FP Equity SGAM INVEST SECTR IMMOBILR-C Societe Generale Asset Managem 793 SICAV EUR Europe FR 

CONVERT FP Equity SGAM INVEST SECTR IMMOBILR-D Societe Generale Asset Managem 793 SICAV EUR 75% Europe FR 

CSEFEPB LX Equity CREDIT SUISSE EQ-EURO PROP-B Credit Suisse Equity Fund Mana 463 FCP EUR Europe LU 

AGFIMOS FP Equity AGFIMO-D AGF Asset Management/France 452 SICAV EUR Europe FR 

AGCOIMO FP Equity COMPAGNIE IMMOBILIERE ACO-IC ACOFI Gestion/France 448 SICAV EUR EuroZone FR 

ODDIMMC FP Equity ODDO IMMOBILIER-C Oddo Asset Management 447 FCP EUR Europe FR 

TRPGIAI GU Equity THAMES RIVER PROPERTY A-INCGBP Thames River Capital CI Ltd 441 Open-End Fund GBP Europe GG 

BNPIMMO FP Equity BNP PARIBAS IMMOBILIER-D BNP Paribas Asset Management/P 434 FCP EUR Europe FR 

INGLEIP LX Equity ING (L) INV-EUROPE RE EST-PC ING Investment Management/Luxe 378 SICAV EUR Europe LU 

ORE NA Equity ORANGE EUROPEAN PROPERTY FD Kempen Capital Management NV/N 376 Open-End Fund EUR Europe NL 

BPOFOIC FP Equity FONCIER INVESTISSEMENT-C Natexis Asset Management/Franc 368 FCP EUR France + Europe FR 

SELFONC FP Equity SELECTION FONCIER La Compagnie 1818 - Gestion/Fr 352 FCP EUR European FR 

EUPROST AV Equity ESPA STOCK EUROPE-PROPERTY-T Erste Sparinvest KAG/Austria 346 Open-End Fund EUR Europe AT 

CROSIMB FP Equity VICTOIRE VALEURS IMMOBILIERE Aviva Gestion d’Actifs/France 334 SICAV EUR Europe FR 

MDMIMMB FP Equity MMA IMMOBILIER MMA Finance/France 316 SICAV EUR Europe FR 

PRIEPP1 LX Equity AVIVA MOR-EURPN PROPERTY-B= Aviva Holdings Luxembourg SA 303 SICAV EUR Europe LU 

AVEPFAE LX Equity AVIVA MOR-EURPN PROPERTY-A= Aviva Holdings Luxembourg SA 303 SICAV EUR Europe LU 

ATL5623 BB Equity ATLAS REAL ESTATE EMU Degroof Institutional Asset Ma 264 SICAV EUR EuroZone BE 

EURAVFI LX Equity EUROPEAN ASSET VAL FD SICAV Asset Value Investors Ltd 245 SICAV EUR France + Europe LU 

BALRUKI FP Equity BALZAC REAL EST EX UK INDEX State Street Gestion SA 241 FCP EUR Europe ex UK FR 

KBC2802 BB Equity KBC INST FD-EUR REAL ESTAT-C KBC Asset Management/Belgium 219 SICAV EUR EU + NO _ CH BE 

AAPFEU NA Equity ABN AMRO PROP SEC FD EUROPE ABN AMRO Investment Management 203 Open-End Fund EUR Europe NL 

EGFIMCC LX Equity E&G FONDS-IMMO EUROPA-C CAP E&G Fonds/Luxembourg 194 SICAV EUR Europe LU 


market focus 


Europe Funds Update AUM Fund Fund Fund 


DEXEEPC BB Equity DEXIA EQUITIES B EURO PROP-C Dexia Asset Management/Belgium 185 SICAV EUR Europe BE 

AMAEURI ID Equity AMADEUS EUROPEAN REAL EST-A= Allianz Global Investors Irela 169 Open-End Fund EUR Europe IE 

BALREEI FP Equity BALZAC REAL EST EUROPE INDEX State Street Gestion SA 162 FCP EUR Europe FR 

EUPROPA AV Equity CONSTANTIA EUROPN PROPRTY-A CPB KAGmbH/Austria 156 Open-End Fund EUR Europe AT 

HENEURP SP Equity HENDERSON EURO PROPERTY SECS Henderson Global Investors Sin 152 Unit Trust SGD Europe SG 

PARVRCC LX Equity PARVEST EUROP REAL ESTATE-CC BNP Paribas Asset Management 137 SICAV EUR Europe LU 

CNPASSP FP Equity CNP ASSUR PIERRE IXIS Asset Management/France 135 SICAV EUR EuroZone FR 

AMO8979 BB Equity AMONIS EQUITY REAL ESTATE Amonis SA/Belgium 130 SICAV EUR Europe + US BE 

FONCSEL FP Equity CPR FONCIERE SELECTION CPR Asset Management/France 126 SICAV EUR EuroZone FR 

BNPAPIM FP Equity ANTIN PEA IMMOBILIER BNP Paribas Asset Management 121 FCP EUR Europe FR 

AIR9671 BB Equity ATHENA IMMO RENTE-C Bank Delen NV 120 SICAV EUR Europe BE 

ISTIMOE SW Equity IST IMMO OPTIMA EUROPA Kempen Capital Management Ltd 105 Open-End Fund CHF Europe CH 

LENEURE LX Equity COHEN & STEERS-EU REAL ES-I Houlihan Rovers SA 100 SICAV EUR Europe LU 

HSBCIMM FP Equity HSBC IMMOBILIER-C HSBC Halbis Partners/France 99 FCP EUR Europe FR 

IBSCIM SM Equity IBERCAJA SECTOR INMOBILIARIO Ibercaja Gestion SGIIC SA/Spai 92 Open-End Fund EUR Europe ES 

LIOTRIM FP Equity DYNALION IMMOBILIER Credit Agricole Asset Manageme 90 FCP EUR France + Global FR 

AVAIMEU SW Equity AVADIS IMMOBILIEN EUROPA Julius Baer Fund Management 90 Open-End Fund CHF Europe CH 

KBS2678 BB Equity KBC SELECT IMMO EUROP PLUS KBC Bank SA 81 SICAV EUR Europe BE 

CPRIMMO FP Equity CAAM ACTIONS IMMOBLIER Credit Agricole Asset Manageme 81 SICAV EUR Europe FR 

AGCOPAI FP Equity ACOFI PATRIMOINE IMMOBILIE-C ACOFI Gestion/France 67 FCP EUR EuroZone FR 

SGEPRAI LX Equity SGAM INDEX FD-EPRA EUROPE-IE SGAM Luxembourg SA 66 SICAV EUR Europe LU 

SNSEVAS NA Equity SNS EURO VASTGOEDFONDS SNS Asset Management 64 Open-End Fund EUR Europe NL 

GARANIM FP Equity GARANTISS IMMO AXA Gestion FCP/France 64 FCP EUR Europe FR 

FONLNGC FP Equity DEXIA EURO VALEURS FONCIER-C Dexia Asset Management 63 SICAV EUR EuroZone FR 

RREXRAD ID Equity RREEF EURO X UK REAL ES-A DI RREEF UK Ltd 62 Open-End Fund EUR Europe ex-UK IE 

RREXRBA ID Equity RREEF EURO X UK REAL ES-B AC RREEF UK Ltd 62 Open-End Fund EUR Europe ex-UK IE 

FO135BI SM Equity FONCAIXA 135 BOLSA INMOB FI InverCaixa Gestion SA SGIIC/Sp 62 Fund of Funds EUR EuroZone ES 

SFLTRNI LX Equity SICAV FRAN-LUX-I-EUROPE IMMO Louvre Gestion/France 61 SICAV EUR Europe LU 

CELKIIN FH Equity CELERES REIT PORPERTY FUND Celeres Fund Management/Finlan 60 Open-End Fund EUR Europe FI 

OBJACTF FP Equity OBJECTIF ACTIFS REELS-D Lazard Freres Gestion SAS 58 SICAV EUR EuroZone FR 

AGFIMOA FP Equity AGF IMO ACTIONS AGF Asset Management/France 56 FCP EUR Europe FR 

ARDIIMM LX Equity ARDI IMMO SICAV-CAP Ardi Immo 54 SICAV EUR Europe LU 

ODEIEN NO Equity ODIN EIENDOM ODIN Forvaltning AS 53 Open-End Fund NOK Nordic NO 

CMAPIER FP Equity CM ACTIONS PIERRE CM-CIC Asset Management 44 FCP EUR Europe FR 

SPUNISI FP Equity UNISIC 1 Sanpaolo Asset Management SA/P 43 FCP EUR Europe FR 

ACOREIM FP Equity ACOFI RENDEMENT IMMOBILIER ACOFI Gestion/France 37 FCP EUR Europe FR 

SEBREEE GR Equity SEB REAL ESTATE EQUITY EUROP SEB Invest GmbH/Germany 36 Open-End Fund EUR Europe DE 

DWSPFCP FP Equity DWS PROPERTY-C DWS Investments/France 34 FCP EUR EuroZone FR 

GREE NA Equity INSINGER REAL ESTATE EQUITY Insinger de Beaufort Asset Man 32 Open-End Fund EUR Europe NL 

LENINPI LX Equity COHEN & STEERS-IN PL E R/E-I Houlihan Rovers SA 28 SICAV EUR Europe LU 

HSBCTEP LX Equity HSBC TRINKAUS EURO PROPERTY HSBC Trinkaus Investment Manag 20 FCP EUR Europe LU 

IIU3429 LX Equity AXA LUX FUND-EUROPEAN IMMO-D AXA Investment Managers Paris/ 18 SICAV EUR Europe LU 

OPKINTA FH Equity OP-KIINTEISTO-A OP Fund Management Co Ltd 17 Open-End Fund EUR Europe FI 

MOREUPA LX Equity MORGAN ST SICAV EUR XUK PR-A Morgan Stanley Investment Mana 17 SICAV EUR Europe ex UK LU 

PARBARE LR Equity PAREX BALTIC REAL ESTATE FD AS Parex Ieguldjumu Prvaldes S 17 Open-End Fund USD Baltic LV 

EREALFD AV Equity CAPITAL INVEST EUROPA REAL-A Pioneer Investments Austria Gm 17 Open-End Fund EUR Europe AT 

UBSERBA LX Equity UBS LUX INST-EUR REAL EST-BA UBS Global Asset Management/Zu 15 SICAV EUR Europe LU 

RREULCE LX Equity RREEF EX-UK REAL ESTATE-LC= DWS Investment SA 9 SICAV EUR Europe ex-UK LU 

PAMEURC BB Equity PAM REAL ESTATE EUROPE-C Petercam SA 1 SICAV EUR Europe BE 

MANKINI FH Equity MANDATUM KINTEISTO-INCOME Sampo Fund Management Ltd/Finl 1 Open-End Fund EUR Europe FI 

TAPREST FH Equity TAPIOLA REAL ESTATE Tapiola Asset Management Co Lt 1 Open-End Fund EUR Europe FI 

ADPRFEU LX Equity COMINVEST PROPTY EUROPE-A cominvest Asset Management S.A -NA- FCP EUR Europe LU 

HAEAERE ET Equity HANSA EAST EURO REAL ESTATE AS Hansa Investeerimisfondid -NA- Open-End Fund EUR Eastern Europe EE 

FMEPAAU LX Equity FIDELITY M-EUR PTY SE-A$ ACC Fidelity International Ltd/Ber -NA- SICAV USD Europe LU 

INGMAAR LX Equity ING DIRECT-MATTONE ARANCIO-P ING Asset Management BV -NA- SICAV EUR Europe LU 

IMOEC LX Equity EUROPA IMMOBILIA CERTIFICATE Merrill Lynch -NA- n/a EUR Europe LU 

SWERLAI LN Equity SWIP EURO REAL ESTATE-A-INC Scottish Widows Investment Partnership -NA- OEIC GBp Europe GB 


TOTAL 23.236

SEK 

6.00 

5.00 

4.00 

3.00 

2.00 

1.00 

0.00 

Castellum 

Håkan Hellström 


Born in 1956. Graduate in Business Administration 

and Economics. Has previously worked as 

Authorised Public Accountant. Employed since 

1994 as Chief Financial Officer and Deputy Chief 

Executive Officer. Chief Executive Officer since 

2006. 

Cash flow from property management per share 

Fair value by type of property 

Business Concept 

Castellum’s business concept is to develop 

and add value to its real estate portfolio, 

focusing on the best possible earnings and 

asset growth, by offering customized commercial 

properties, through a strong and clear 

presence in five Swedish growth regions. 

Focus on Cash Flow 

The objective is to focus on cash flow growth, 

which along with a stable capital structure, 

provide the preconditions for good growth in 

the company, while at the same time offering 

shareholders a competitive dividend. The 

objective is an annual growth in cash flow of 

at least 10%. In order to achieve this objective, 

investments of at least SEK 1,000m per 

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 

Office/retail 65% Warehouse/industrial 31% 

By Håkan Hellström 

market focus 

Castellum is one of the major listed real estate companies in Sweden. The fair value of the 

real estate portfolio amounts to over SEK 25 billion, and comprises commercial properties 

with a lettable area of approx. 2,787,000 sq.m. 

The Castellum share is registered on OMX – The Nordic List Large cap. 

Projects and 

undeveloped land 4% 

year will be made. All investments will contribute 

to the objective of growth in income 

from property management within 1-2 years 

and have a value potential of at least 10%. 

Cash flow for the year, i.e., income from 

property management, amounted to SEK 

883m, equivalent to SEK 5.38 per share. The 

improvement is 8% and is chiefly an effect of 

investments made and lower interest rate 

costs. 

Real Estate Portfolio with a Commercial 

Focus 

Castellum is one of the major listed real 

estate companies in Sweden. The fair value 

of the real estate portfolio amounts to over 

SEK 25 billion and comprises commercial 

properties. Castellum’s real estate portfolio 

is concentrated in Greater Gothenburg, the 

Öresund Region, Greater Stockholm, 

Mälardalen and Eastern Götaland. Within 

each of these regions focus is placed on 

market areas and sub-markets where sufficient 

volume can be found to provide the 

pre-requisites for good business opportunities 

by rational management and strong 

presence. 

Investments, for example, enhancement and 

development of existing properties, acquisitions 

of new properties and new construction, 

are carried out in areas with high 

growth rates where opportunities are found 

for increased occupancy rates, increased 

rental levels and improved cash flows. 

During 2006, Castellum made investments 

totalling SEK 2,283m, of which SEK 1,292m 

were acquisitions and SEK 991m investments 

in existing properties. During the year 12 

properties were sold for a total of SEK 460m, 

which gave SEK 83m in realized results. 

During 2006, the price of real estate has continued 

to increase. For Castellum’s real estate 

portfolio the assumption is that the market 

yield has been reduced by 0.4% units since 

the end of 2005. Changes in value for the 

year amount to SEK 1,145m - equivalent to 

approximately 5%. % 


market focus 

In Arendal, next to the port of Gothenburg, a warehouse and logistics property of 27,000 sq.m. has been built during 2006. The entire property is let by an 

international logistics company. 

Decentralised and Small Scale Organisation 

Castellum’s operations are run in a smallscale 

organization comprising six subsidiaries 

which own and manage the properties under 

their own brands, see below. By having local 

roots the subsidiaries get close relations with 

the customers and good knowledge of the 

market situation and rental development 

within each market area. Property management 

is mainly carried out by own personnel. 

Castellum has skilled and committed employees 

in every position. The group should be 

an attractive workplace with good development 

possibilities. The Castellum group had 

as at December 31, 2006, 199 employees and 

each subsidiary has around 30 employees. 

Castellum views a sustainable development 

with economic growth, social development 

and environmental concern a pre-requisite 

for successful business operations. 

Customers 

Good and long-term customer relations and 

hence satisfied customers is a pre-requisite 

for creating long-term growth in Castellum. 

This is achieved by providing efficient and 

Eklandia: 

Central and eastern 

Gothenburg and 

Hisingen 


By Håkan Hellström 

Harry Sjögren: 

Southern Gothenburg, 

Mölndal, Borås and 

Kungsbacka 

well situated premises meeting the customers’ 

needs regarding both appropriate premises 

as well as service. 

During the year, 737 new lease contracts 

were signed with a total annual value of SEK 

287m, while contracts terminated amounted 

to SEK 167m. Therefore, net leasing for the 

year was SEK 120m. Of the new signed contracts 

approximately 75% came from own 

networks, recommendations or existing customers 

expanding, while around 15% came 

from web pages and advertisements, and 

the remaining 10% came through agents. 

Castellum has a good risk exposure in the 

lease portfolio, consisting of approx. 3,900 

commercial contracts spreading over many 

sectors and durations. The economic occupancy 

rate for 2006 was 87.1% 

Stable Capital Structure 

Castellum’s strategy is to have a stable capital 

structure, meaning an equity/asset ratio of 

35-45% and an interest coverage ratio of at 

least 200%. As of December 31, 2006 the 

equity/assets ratio was 42% and the interest 

coverage ratio for 2006 was 343%. 

Briggen: 

Malmö, Lund and 

Helsingborg 

Brostaden: 

Greater Stockholm 

Castellum’s dividend policy is that at least 

60% of income from property management 

after full tax deduction will be distributed, 

however investment plans, consolidation 

needs, liquidity and financial position in 

general will be taken into account. The Board 

proposes the Annual General Meeting 2007 a 

dividend of SEK 2.85 per share, which is an 

increase of 9% compared to previous year. 

The dividend ratio is 73%. 

Castellum Shares 

Castellum works for a stable and positive 

price trend with high liquidity in the company’s 

shares. The company’s strategy and 

actions are made with a long term perspective 

in mind. 

The Castellum share is listed on OMX – The 

Nordic List Large cap and had at December 

31, 2006 approximately 7,700 shareholders, 

of which 47% are Swedish and 53% foreign. 

The Castellum share price at the same time 

was SEK 91.25, which is equivalent to a 

market capitalization of SEK 15 billion. Since 

IPO on 23 May, 1997 the total yield of the 

Castellum share has been on average 24.8% 

per year. $ 

Aspholmen: 

Örebro, Uppsala 

and Västerås 

Corallen: 

Värnamo, Jönköping, 

Växjö and Linköping

SEKm 

2500 

2000 

1500 

1000 

500 

0 

-500 

-1000 

Investments and sales per year 

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 

SEKm 

Net leasing per quarter 

120 

100 

80 

60 

40 

20 

0 

-20 

-40 

-60 

-80 

Financing 31-12-2006 

Investments in existing properties Acquisitions 

Properties sales Net investment 

Shareholders’ equity 

SEKm 10 184 (42%) 

Interest bearing 

liabilities 

SEKm 10 837 (44%) 

Total yield (including dividend) 

New leases Terminations Net leasing, 

rolling annual value 

2000 2001 2002 2003 2004 2005 2006 

Deferred tax liabilities 

SEKm 2 723 (11%) 

Derivatives 

SEKm 55 (0%) 

Non interest 

bearing liabilities 

SEKm 647 (3%) 

On average per year 

2006 May 1997 – 2006 

Castellum +31.3% +24.8% 

OMX Stockholm (SIX Return) +28.1% +11.1% 

Real Estate Index Sweden (EPRA) +35.8% +21.2% 

Real Estate Index Europe (EPRA) +49.4% +17.5% 

Castellum 

Inside, looking out from one of the four properties 

Castellum acquired in the beginning of 

January 2007 in Linköping. The properties are 

located in Mjärdevi Science Park and comprises 

35,000 sq.m. lettable area of which approx. 

26,000 sq.m. are office premises. 

market focus 


eference 

Index Value (rebased to 100) 

330 

280 

230 

180 

130 

FTSE EPRA/NAREIT Global Real Estate Indices 

Global 

epra/nareit global real estate index 

EPRA/NAREIT Europe TR (EUR) 201.1% 

EPRA/NAREIT North America TR (USD) 150.9% 

EPRA/NAREIT Global TR (USD) 188.0% 

EPRA/NAREIT Asia TR (USD) 224.1% 

80 

July 03 Oct 03 Jan 04 April 04 July 04 Oct 04 Jan 05 April o5 July 05 Oct 05 Jan 06 April o6 July o6 


& Time ’ 

Oct o6 Jan 07 

Price Total 

Investment Rtn (%) Rtn (%) 

Company Country focus Sector Feb-07 Dividend Feb-07 

Mori Trust Sogo REIT* JP Rental Office 28.23 0.00 28.23 

United Urban Investment * JP Rental Diversified 23.04 0.00 23.04 

Daibiru Corp JP Non-Rental Office 22.90 0.00 22.90 

Premier Investment Co. * JP Rental Diversified 21.29 0.00 21.29 

TK Development DK Non-Rental Retail 20.73 0.00 20.73 

Freeport UK Rental Retail -10.53 0.00 -10.53 

Cousins Properties * US Non-Rental Diversified -12.26 0.95 -11.32 

Warner Estate Holdings UK Rental Diversified -11.44 0.00 -11.44 

Deutsche Wohnen DE Rental Residential -12.91 0.00 -12.91 

Assura UK Rental Health Care -15.74 0.00 -15.74 

ftse epra/nareit global real estate index 

Global 

Healthcare 4% 

Latin America 0% 

North America 44% 

Asia 34% 

Europe 22% 

global investment focus market cap breakdown 

Global Rental 75.4% 

sector breakdown - global 

Global Specialty 1% 

Global Diversified 

42% 

Global Industrial/Office 1% 

Global 

Non-Rental 24.6% 

Global 

Self Storage 2% 

Global Retail 

28% 

Global Office 

18% 

Global 

Lodging/Resorts 4% 

Close Div Total Total Total Total Total 

Value Yld (%) Rtn (%) Rtn (%) Rtn (%) Rtn (%) Rtn (%) 36 Mths 

Index Description Feb-28 Feb-28 - 5 Yrs - 3 Yrs - 1 Yr Feb-07 YTD Vlty (%) 

EPRA/NAREIT Europe TR (EUR) 3815.25 2.02 24.51 33.75 30.66 -0.58 -1.03 10.78 

EPRA/NAREIT Asia TR (USD) 2861.73 2.66 29.33 30.49 39.53 3.92 8.48 12.82 

EPRA/NAREIT North America TR (USD) 4419.83 3.49 24.75 27.31 33.37 -1.76 6.55 16.09 

EPRA/NAREIT Global TR (USD) 3788.27 2.89 28.13 30.24 37.82 0.72 5.56 12.58


450 

400 

350 

300 

250 

200 

150 

100 

Asia 

epra/nareit asia real estate index 

EPRA/NAREIT Australia TR (AUD) 117.9% 

EPRA/NAREIT Japan TR (JPY) 316.7% 

EPRA/NAREIT Singapore TR (SGD) 261.4% 

EPRA/NAREIT Hong Kong TR (HKD) 202.3% 

50 


Price Total 



Mori Trust Sogo REIT* JP Rental Office 28.23 - 28.23 

United Urban Investment * JP Rental Diversified 23.04 - 23.04 

Daibiru Corp JP Non-Rental Office 22.90 - 22.90 

Premier Investment Co. * JP Rental Diversified 21.29 - 21.29 

Allco Commercial 

& Time ’ 

Oct o6 Jan 07 

Real Estate Investment Trust SG Rental Diversified 16.22 - 16.22 

GPT Group * AU Rental Diversified -7.68 1.28 -6.40 

Macquarie DDR * AU Rental Retail -6.62 - -6.62 

Centro Retail Trust * AU Rental Retail -6.75 - -6.75 

Tishman Speyer Office Fund * AU Rental Office -8.22 - -8.22 

China Overseas Land HK Non-Rental Residential -8.69 - -8.69 

regional breakdown asia 

Hong Kong 23% 

Asia 

Rental 44% 

Asia Diversified 

42% 

Singapore 7% 

Japan 39% 

Australia 31% 

asia investment focus market cap breakdown 

sector breakdown - asia 

Asia 

Non-Rental 56% 

Asia Retail 

18% 

Asia 

Residential 3% 

Asia Office 

16% 


p For more information about the FTSE EPRA/NAREIT Global Real Estate Indices, e-mail: info@epra.com or info@ftse.com 

Asia 

Industrial 5% 



EPRA/NAREIT Australia TR (AUD) 3035.01 5.14 19.42 26.94 32.76 -0.66 1.89 8.98 

EPRA/NAREIT Hong Kong TR (HKD) 1965.04 2.16 20.92 21.03 26.58 -1.06 2.31 18.06 

EPRA/NAREIT Japan TR (JPY) 4427.47 0.83 31.29 43.05 46.84 7.28 18.27 23.30 

EPRA/NAREIT Singapore TR (SGD) 2087.06 2.31 24.91 43.81 59.84 5.19 11.43 16.76 

reference 


eference 


420 

400 

380 

360 

340 

320 

300 

280 

260 

240 

220 

200 

180 

160 

140 

120 

100 

FTSE EPRA/NAREIT Global Real Estate Indices 

Europe 

epra/nareit europe real estate index 

EPRA/NAREIT UK TR (GBP) 179.3% 

EPRA/NAREIT Netherlands TR (EUR) 158.4% 

EPRA/NAREIT France TR (EUR) 298.7% 

EPRA/NAREIT Sweden TR (SEK) 262.6% 

80 



& Time ’ 

Oct o6 Jan 07 

Price Total 



TK Development DK Non-Rental Retail 20.73 - 20.73 

St Modwen Properties UK Rental Diversified 19.63 - 19.63 

Icade FR Rental Diversified 13.12 - 13.12 

Unibail * FR Rental Diversified 12.94 - 12.94 

Warehouses De Pauw * BE Rental Industrial 10.01 - 10.01 

Primary Health Prop. * UK Rental Health Care -9.52 - -9.52 

Freeport UK Rental Retail -10.53 - -10.53 

Warner Estate Holdings UK Rental Diversified -11.44 - -11.44 

Deutsche Wohnen DE Rental Residential -12.91 - -12.91 

Assura UK Rental Health Care -15.74 - -15.74 

regional breakdown europe 

Sweden 5% 

Austria 8% 

Other 

Countries 

15% 

France 15% 

Netherlands 

12% 

Europe Rental 95% 

UK 45% 

europe investment focus market cap breakdown 

sector breakdown - europe 

Europe Specialty 1% 

Europe 

Diversified 

51% 

Europe Healthcare 1% 

Europe Industrial 5% 

Europe Lodging/Resorts 0% 

Europe 

Non-Rental 5% 

Europe 


Europe Retail 

24% 

Europe 

Office 14% 


Europe 




EPRA/NAREIT UK TR (GBP) 3658.17 1.77 23.18 30.13 23.05 -1.60 -7.75 14.07 

EPRA/NAREIT Netherlands TR (EUR) 3820.7 3.82 24.94 30.41 31.02 1.34 4.90 12.78 

EPRA/NAREIT France TR (EUR) 5463.88 2.01 36.43 48.68 52.94 7.97 9.57 15.37 

EPRA/NAREIT Sweden TR (SEK) 5633.76 3.10 30.21 42.17 26.03 1.18 5.03 21.57


260 

240 

220 

200 

180 

160 

140 

120 

100 

North America 

epra/nareit north america real estate index 

EPRA/NAREIT United States TR (USD) 148.4% 

EPRA/NAREIT Canada TR (CAD) 144.8% 

80 


& Time ’ 

Oct o6 Jan 07 

Price Total 



Boardwalk REIT * CA Rental Residential 19.09 0.29 19.39 

Sunrise Senior Living REIT * CA Rental Health Care 17.00 0.49 17.49 

Mills Corporation * US Rental Retail 15.33 - 15.33 

New Plan Excel Realty * US Rental Retail 14.66 - 14.66 

Primaris Retail REIT * CA Rental Retail 11.57 0.50 12.07 

Equity Residential Props * US Rental Residential -9.75 - -9.75 

Health Care Properties * US Rental Health Care -10.86 1.08 -9.78 

Archstone-Smith Trust * US Rental Residential -10.76 0.72 -10.04 

Maguire Properties Inc. * US Rental Office -10.10 - -10.10 

Cousins Properties * US Non-Rental Diversified -12.26 0.95 -11.32 

regional breakdown north america 

Canada 8% 

United States 92% 

north america investment 

focus market cap breakdown 

North America 

North Diversified 9% 

America 

Healthcare 7% 

North 

America 

Office 15% 

North America 

Rental 90% 

North America 

Non-Rental 10% 

sector breakdown - north america 

North America 

Retail 29% 

North 

America 


North America Lodging/Resorts 8% 

North America Industrial 6% 

North America Industrial/Office 3% 

North America Specialty 1% 

North America 





EPRA/NAREIT Canada TR (CAD) 4349.79 4.05 23.33 25.26 39.85 3.25 12.26 12.21 

EPRA/NAREIT United States TR (USD) 4379.7 3.44 24.41 27.06 33.11 -2.21 6.15 16.44 

p For more information about the FTSE EPRA/NAREIT Global Real Estate Indices, e-mail: info@epra.com or info@ftse.com 

reference 


eference 

Global Real Estate Universe 

Sources: World Bank Organisation, FTSE, EPRA. 


2006 2006 2006 Dec-29-06 Feb-28-07 Feb-28-07 Feb-28-07 

GDP GDP Real Estate Total Total RE Stock Market Stk Mkt 

Countries ($ Bn) per capita ($) ($ Bn) Listed ($ Bn) v Listed RE (%) ($ Bn) v Listed RE (%) 

Japan 4,497 35,315 2,024 188.1 9.29% 4,911 3.83% 

Hong Kong/China 2,420 1,854 493 158.6 32.18% 3,188 4.98% 

South Korea 784 16,253 329 1.1 0.32% 769 0.14% 

India 764 717 113 0.6 0.51% 859 0.07% 

Australia 690 34,664 311 120.1 38.66% 927 12.96% 

Taiwan 340 14,965 139 5.1 3.64% 634 0.80% 

Indonesia 299 1,255 53 1.4 2.69% 134 1.07% 

Thailand 176 2,719 41 3.5 8.51% 135 2.57% 

Malaysia 132 5,618 39 7.0 17.87% 257 2.71% 

Singapore 119 27,381 107 49.3 45.95% 391 12.60% 

New Zealand 101 25,230 49 2.8 5.74% 42 6.76% 

Philippines 102 1,178 18 4.9 27.67% 74 6.66% 

Vietnam 51 611 7 - 0.00% - 0.00% 

Total Asia-Pacific 10,475 20,348 3,723 542,3 14.57% 12,319 4.40% 

Germany 2,787 33,811 1,254 24.0 1.91% 1,783 1.35% 

United Kingdom 2,224 36,906 1,251 122.8 9.82% 3,764 3.26% 

France 2,121 35,108 955 80.3 8.41% 2,513 3.20% 

Italy 1,762 30,357 793 12.8 1.61% 1,077 1.19% 

Spain 1,121 27,833 505 63.7 12.63% 975 6.53% 

Russia 780 5,342 226 5.0 2.20% 1,006 0.50% 

Netherlands 630 38,598 283 34.1 12.02% 508 6.71% 

Switzerland 367 49,302 165 9.3 5.60% 1,235 0.75% 

Belgium 369 35,645 166 7.0 4.19% 386 1.80% 

Sweden 361 40,125 162 20.0 12.33% 605 3.31% 

Turkey 345 5,003 98 1.6 1.63% 166 0.96% 

Austria 304 37,177 137 27.0 19.76% 228 11.83% 

Poland 295 7,643 96 7.8 8.11% 160 4.90% 

Norway 295 64,471 133 4.8 3.60% 326 1.47% 

Denmark 259 47,784 116 3.0 2.59% 246 1.23% 

Greece 224 21,082 101 3.1 3.11% 211 1.49% 

Ireland 200 50,469 90 - 0.00% 147 0.00% 

Finland 195 37,483 88 2.9 3.31% 279 1.04% 

Portugal 183 17,360 78 - 0.00% 114 0.00% 

Czech Republic 77 7,520 25 - 0.00% 49 0.00% 

Hungary 103 10,242 37 0.6 1.51% 40 1.41% 

Romania 96 4,290 26 0.4 1.35% 29 1.23% 

Ukraine 81 1,659 16 - 0.00% 66 0.00% 

Slovakia 30 5,479 9 - 0.00% 7 0.00% 

Slovenia 33 16,583 14 - 0.00% 17 0.00% 

Luxembourg 36 78,352 16 1.5 9.33% 31 4.98% 

Bulgaria 26 3,482 7 - 0.00% 10 0.00% 

Total Europe 15,305 31,854 6,848 431.6 6.30% 15,976 2.70% 

Mexico 756 7,199 242 0.1 0.03% 347 0.02% 

Brazil 797 4,328 215 0.6 0.27% 739 0.08% 

Argentina 185 4,738 52 0.6 1.17% 51 1.19% 

Venezuela 136 5,436 40 - 0.00% 12 0.00% 

Colombia 116 2,735 27 - 0.00% 50 0.00% 

Chile 117 7,401 38 0.4 1.07% 174 0.23% 

Peru 80 2,891 19 0,1 0.28% 51 0.10% 

Total Latin America 2,186 5,452 632 1.7 0.27% 1,425 0.12% 

United States 12,480 42,590 5,616 509.7 9.08% 17,713 2.88% 

Canada 1,135 34,903 511 40.1 7.85% 1,466 2.73% 

Total Nth America 13,615 41,950 6,127 549.7 8.97% 19,179 2.87% 

World 41,582 - 17,329 1,525.4 8.80% 48,900 3.12%

Return 

250 

200 

150 

100 

50 

35% 

30% 

25% 

20% 

15% 

10% 

Global Real Estate vs Equities & Bonds 

0 

27-02-04 31-08-04 28-02-05 31-08-05 28-02-06 31-08-06 28-02-07 

5% 

0% 

FTSE EPRA/NAREIT Global RE 95% 

FTSE World 42% 

JP Morgan Global Funds 12% 

Rolling 10 Years Risk/Return Profiles Local Currencies - Countries 

Global Bonds 

France 

Canada 

Europe RE Global RE 

Nth Am RE 

Australia US 

Sweden 

Netherlands 

Belgium 

UK 

Switzerland 

Global 

Equities 

Spain 

Germany 

Japan 

Asia RE 

Italy 

Finland 

Underlying Real Estate 

North America 35% 

Latin America 4% 

Listed Real Estate 

Hong Kong 

Denmark 

Singapore 

Asia 21% 

Europe 40% 

North America 36% Asia-Pacific 36% 

Latin 

America 0% 

Europe 28% 

-5% 

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 60% 

Risk (St Deviation) 

reference 


eference 

Working Committees 

Background 

EPRA’s underlying knowledge and experience 

lies within the EPRA working committee 

structure. When the association was 

established in 1999 it was decided that rather 

than try to build a large organisation with 

the experience in-house, the association 

would be kept ‘lean and mean’ and that the 

real work of the association would be carried 

out by working committees. Originally the 

committee structure consisted of four main 

working committees, with the addition of the 

Broadening the Investor Base Committee in 

2005. The deployment of the working committees 

is made in direct reaction to market 

developments. 

1. Best Practices 

Committee 

The Chairman of the 

B e s t P r a c t i c e s 

Committee is Hans 

Grönloh of KPMG. The 

goals for the committee 

are to develop and 

publish Best Practices Recommendations 

with regard to consistent and meaningful 

EPRA Organisation 

Information Committee 

(James Rehlaender) 

Academic Circle 

Website Committee 

EPRA/NAREIT 

Global Real Estate Index 

Committees 


Best Practices Committee 

(Hans Gronloh) 

definitions of items such as income and net 

asset value as well as additional disclosure 

of the assets and business of each company. 

It is important to reiterate that all of EPRA’s 

Best Practices Recommendations are 

intended to be fully consistent with IAS 

accounting guidelines. Ultimately, we are 

convinced that consistent and transparent 

disclosure will attract investors to an industry 

where they clearly understand the opportunities 

and the risks. A new version of the 

Best Practices Recommendations was issued 

in November 2006. Hans Bruggink was 

appointed on a part-time basis in January 

2007 to support the work of the committee. 

2. Information Committee 

The Chairman of the Information Committee 

is James Rehlaender of European Investors. 

The primary objective of this committee is to 

provide top quality, timely information to 

investors concerning relevant aspects of the 

sector. The Information Committee is split 

into three separate sub-committees: the 

Indices Committee, the Website Committee, 

and the Academic Circle. 

Valuation Committee 

Transparency & 

Disclosure Committee 

Corporate 

Governance 

Committee 

EPRA Executive Board 

(Serge Fautre) 

EPRA Management Board 

EPRA Executive Staff 

(Nick van Ommen) 

Regulatory & Liaison Committee 

(Nick van Ommen) 

Lobby 

Function 

Tax 

Committee 

(a) Regional Index Committees 

In terms of scope, construction criteria, 

quality, transparency and accessibility, the 

FTSE EPRA/NAREIT Global Real Estate Index 

clearly surpasses all comparable indices and 

has been adopted by the worldwide investment 

community. The index is now seen as 

the leading index for the quoted real estate 

sector worldwide. With a view to develop the 

index further, the calculation of the index 

transferred to FTSE Group as at 21 February 

2005. 

The FTSE EPRA/NAREIT Global Real Estate 

Index provides users with a very clear and 

transparent set of ground rules ensuring the 

indices are objective and understandable. 

The FTSE EPRA/NAREIT Global Real Estate 

Index is governed by three regional advisory 

committees, which meet on a quarterly 

basis, in March, June, September and 

December to ensure the index remains representative 

of the underlying real estate 

market. In addition, the FTSE EPRA/NAREIT 

Global Real Estate Index attracts new investment 

and deepens liquidity in the sector. 

Events Committee 

(Elias Woudenberg) 

Broadening the Investor 

Base Committee 

(Paul Rivilin)

EPRA produces a monthly Statistical Bulletin, 

covering the FTSE EPRA/NAREIT Global Real 

Estate Index, which encompasses an array of 

useful and exhaustive statistical data on performance, 

market events and index changes. 

This is an essential “hard copy” tool for professionals 

and provides the clearest possible 

window on the sector around the world. In 

addition, daily ‘tracker’ files are available 

from FTSE. 

The last round of regional index committees 

took place on 7 March with the changes 

effective 19 March. The latest review used the 

updated ground rules for size and liquidity. 

The next round of regional index committee 

meetings will be held on Wednesday 6 June 

2007. 

(b) Website Committee 

The website of EPRA is not only the gateway 

to EPRA and all its work, but also to its 

members and a world of information about 

the sector. The www.epra.com website averages 

approximately half a million hits per 

month. This is an astounding figure and is 

indicative of the quality information available 

and the interest in the sector. EPRA has 

a panel of individuals from different countries, 

whose task it is to discuss the role and 

content of the website, ensuring that it meets 

user’s requirements and responds to new 

challenges. In September 2004 we launched 

the new version of www.epra.com to positive 

feedback from investors. We continually 

examine how we can improve the website 

and make enhancements on a regular basis. 

(c) Academic Circle 

The EPRA Academic Circle was formed in 

2002, and is chaired by Martin Allen of 

Morgan Stanley. The Academic Circle brings 

together the 11 leading real estate faculties 

around the world to provide EPRA with an 

extremely valuable resource. EPRA provides 

the funding for the Academic Circle to 

produce research on topics that directly affect 

the sector. The selection criteria for the topics 

are not only academically demanding 

but should be assessable to practitioners. 

The University of Cambridge issued the 

“Diversification Benefits of European Real 

estate Stocks” in September 2006. The circle 

conducts research based upon the demands 

of the market and our members. Academic 

Circle members are: 

• 

Amsterdam School of Real Estate 

EBS Immobilienakademie 

KTI Finland 

• 

MIT Center for Real Estate 

National University of Singapore 

University of Cambridge 

University of Hong Kong 

University of Reading 

University of Western Sydney 

Universite Paris Dauphine 

Wharton School, Zell – Laurie Real Estate 

Center 

3. Regulatory and Liaison Committee 


identify and remove obstacles to free crossborder 

investment in real estate companies. 

The interim Chairman of the Regulatory and 

Liaison Committee is Nick van Ommen. The 

Regulatory and Liaison Committee is still a 

somewhat dormant committee although 

there will be increased activities towards 

governments, European Union, supranational 

bodies like IASC and IVSC as an 

outcome of the good work done by other 

EPRA committees. The decision has been 

taken to focus the future activities of the 

regulatory committee on the promotion of 

tax transparent property vehicles in Europe, 

as well at national levels. 

(a) Tax Committee 

The Tax Committee, chaired by Matthias 

Roche of Ernst & Young in Germany, has two 

objectives. Firstly the committee maintains 

an inventory of worldwide tax transparent 

structures. On the basis of this inventory the 

TTC will publish recommendations as to 

what the most supportive elements are from 

these different structures (the short term 

goals) and what could be the most preferred 

structure for a European REIT (the long term 

goal). The second objective is to provide 

European legislators with the evidence that 

tax transparent structures are beneficial for 

the tax collectors, the companies, the investors 

and the tenants. As a result this will 

have significant macro-economic effects. The 

Academic Circle aims to provide supportive 

evidence for tax transparent structures 

through separate research projects. In 

September 2004 we issued an update of the 

EPRA Global REIT survey. During the first 

half of 2007 we plan to update the EPRA 

Global REIT survey to include the developments 

in the United Kingdom and Germany. 

In addition, a broader range of countries will 

be included in the survey, such as Russia, 

Turkey, and New Zealand. 

4. Events Committee 


establish a high-level communication plat- 

Working Committees 

form for the European public real estate 

sector by organizing productive and influential 

events. The annual EPRA conference is 

already established as the leading, dedicated 

meeting point for the European quoted 

property sector. The combination of the twoday 

programme, the overall quality of the 

attendees, and the venue contributes to the 

conference’s growing success. The Executive 

Board of EPRA acts as the programme committee 

and seeks to attract top-class keynote 

speakers and panels of CEO’s and other 

senior representatives of real estate companies, 

investors, and their advisers. At the 7th 

Annual Conference in Budapest in September 

2006, the “Best Annual Report Award 2005”, 

sponsored by PGGM, was won by VastNed 

Retail. The “Best Large Cap Performer Award 

2005”, sponsored by LaSalle Investment 

Management was picked up by IVG 

Immobilien, and Workspace Group won the 

“Best Small/Mid Cap Performer Award 

2005”, sponsored by Kempen & Co. Besides 

EPRA organised “road shows” in many countries, 

the EPRA management and executive 

board members also represent EPRA as 

speakers or panellists at various conferences 

in Europe, the United States, and Asia. The 

2007 annual conference will be held in the 

Hotel Grande Bretagne in Athens on the 6 & 

7 September. 

5. Broadening the Investor Base 

Committee 

This committee was set up in 2005 and is 

currently under the supervision of Paul Rivlin 

of EuroHypo Real Estate Investment Banking 

in London. The aim of the committee is to 

take the real estate message to a broader 

audience, panning both institutional and 

retail investors. The first piece of research to 

be issued by the committee in October 2006 

was the “Diversification Benefits of European 

Real Estate Stocks” by the University of 

Cambridge. The research provides investors 

with a clear picture of how investing in listed 

real estate stocks can add benefits to a multiasset 

portfolio, in terms of risk and reward. 

The University of Regensburg recently completed 

research focusing on the correlation 

of real estate against other asset classes. This 

research will be distributed in May. $ 

reference 


2007 

EPRA ANNUAL CONFERENCE 

LISTING FOR ALL SEASONS 

THURSDAY 6 TH & 

FRIDAY 7 TH SEPT EMBER 2007 

athens greece

THURSDAY SEPTEMBER 6 TH 

2007 

FRIDAY SEPTEMBER 7 TH 

2007 

P R O V I S I O N A L 

P R O G R A M M E 

O P E N I N G p 

K E Y N OT E S P E A K E R p 

PA N E L D I S C U SS I O N I p 

A W A R D P R E S E NTAT I O N p 

A C A D E M I C C I R C L E p 

PA N E L D I S C U SS I O N I I p 


P R O V I S I O N A L 

P R O G R A M M E 

K E Y N OT E S P E A K E R p 


S E SS I O N I p 

S E SS I O N I I p 

S E SS I O N I I I p 

S E SS I O N I V p 

PA N E L D I S C U SS I O N I I I p 

T I M E 

By: Editors Name 

08:00 • 09:15 Breakfast and conference registration 

09:15 • 09:30 Opening remarks by Serge Fautré, Chairman of EPRA 

09:30 • 10:15 To be confirmed 

10:15 • 11:15 WHERE IS THE PRODUCT? 

Moderator: Ian Hawksworth, Capital & Counties 

Panel members: 4 CEO’s of large listed companies 

11:30 • 12:00 Break 

EPRA Best Annual Report 2006, sponsored by PGGM 

12:00 • 13:15 Discussion leader: Prof. Tony Ciochetti, MIT 

Presentations by: 3 leading Universities 

13:15 • 14:45 Lunch 


14:45 • 15:45 I WANT YOUR PROPERTY! 

Moderator: Peter Lowy, Westfield 

Panel members: 4 CEO’s of large listed companies 

EPRA Best Small/MidCap Performance Award 2006, sponsored by Kempen & Co 

16:00 • 17:30 Networking garden party 

19:00 Cocktails & Dinner in the Zappeion 

T I M E 

08:00 • 09:00 Breakfast 

09:00 • 09:45 To be confirmed 

* ON THURSDAY EPRA WILL ORGANISE A PARTNER’S PROGRAMME * 

EPRA Best Large Cap Performance Award 2007, 

sponsored by LaSalle Investment Management 

10:00 • 12:15 2 x 2 Concurrent Sessions 

10:00 • 11:00 UK-REITs 

Moderator: Patrick Sumner, Henderson Global Investors 

Panel members: To be arranged with moderator 

10:00 • 11:00 EUROPEAN EMERGING MARKETS 

Moderator: Karl Petrikovics, Immoeast 


11:00 • 11:15 Break 

11:15 • 12:15 G-REITs 

Moderator: Ronald Wijs, Loyens & Loeff 


11:15 • 12:15 ASIA & SOUTH AMERICAN EMERGING MARKETS 

Moderator: Nick Tyrell, JP Morgan 


12:30 • 13:30 I GOT YOUR PROPERTY! 

Moderator: John Carrafiell, Morgan Stanley 

Panel members: 2 CEO’s of hedge/buy-out companies 

and 2 CEO’s of property companies 

13:30 • 15:00 Lunch 


Closing remarks Nick J.M. van Ommen, CEO of EPRA

greece - athens 

2007 

SPONSORS 

HEADLINE SPONSORS 

��

HOLD 

THESE 

DATES 

CONFERENCE 

HOTEL 

reGISTrATIOn ePrA AnnUAL cOnference ATHenS 6 & 7 SePTeMBer 2007 

Name: Mr./Ms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Position: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Company: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Invoicing address:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Postcode / City / Country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Telephone number: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fax number: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

E-mail address: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

REGISTRATION FEE: EPRA members € 1,250.= excl. VAT / Non-members € 2,500.= excl. VAT 

MEETING LOCATION: Hotel Grande Bretagne, Constitution Square, 105 63 Athens, Greece 

Tel +30 210 333 0000, Fax +30 210 322 8034, www.grandebretagne.gr 

PAYMENT CONFERENCE: Upon receipt of EPRA invoice. Payment of invoice by: 

1 Bank transfer (bank details will be shown on the invoice) or 

2 Cheque (if paying by cheque, please add an additional 10% to your 

registration fee for bank processing) 

CONFERENCE 

CANCELLATION POLICY: If cancellation is notified to EPRA in writing: 

• before 18 June 2007: free of charge 

• between 18 June and 15 July 2007: 50% of the conference fee 

• after 15 July 2007: full registration fee 

You may transfer your registration, without penalty, to another member 

of your organisation. 

Please indicate your interest: 7 September 2007: 

6 September 2007: Concurrent sessions: 

Dinner: Yes No I UK REITs 

Networking garden party: Yes No Or: II Eur. Emerging Markets 

Partners programme: Yes * No 

* Partner’s first & last name: III G-REITs 

Or: IV Asia & S. American 

Emerging Markets 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lunch: Yes No 

Hotel accommodation is not included in the registration fee. EPRA has negotiated a special room 

rate for participants of the Annual Conference at the Hotel Grande Bretagne. 

No hotel 

Yes, check-in date: ..…. / 09 / 2007, check-out date: …... / 09 / 2007 

Classic room, single use € 235.= Classic room, double use € 255.= 

(rates are per night including breakfast and excluding local taxes) 

PAYMENT HOTEL: By credit card when checking out: 

American Express MasterCard Visa Diners Club 

Name cardholder: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Credit card number: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Expiration date: . . . . . . . . . . . . . . . . . /. . . . . . . . . . . . . . . . . 

HOTEL 

CANCELLATION POLICY: If cancellation is notified to EPRA in writing: 

• before 1 May 2007: free of charge 

• between 1 May and 30 June 2007: 50% of the total accommodation costs 

after 1 July 2007: 100% of the total accommodation costs 

• 

PLEASE RETURN BY FAX TO EPRA +31 (0)20 405 3840 

EPRA is not responsible for accommodation or travel expenses relating to this conference.

epra news - maand 2006 - www.epra.com 

Schiphol Boulevard 283 1118 BH Schiphol Airport The Netherlands 

T +31 20 405 3830 F +31 20 405 3840 W www.epra.com

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